Example of commodity trade in real life - Sri Lanka and Vitol. Accurate?
So the one thing I've been noticing in commodities trading posts is that while there are a few posters that go into relatively deep detail, there's never really a clear example of a trade. From my understanding with the whole Sri Lanka situation and Vitol supplying gas, is this how the trade could be structured (yes i know commodities are a secretive world, no need to spill all the beans).
Wanted to know if this is how the process roughly works. So if this is completely wrong, call me out on it.
Sri Lanka PM gets his energy department staff to call up oil traidng houses (Glencore, Vitol, Trafigura, etc).
Geneva/London/Houston traders at these firms compete to put best price. Some Vitol guy in Houston "wins" the contract. For simplicity, Sri Lanka is requesting 100 gallons of gasoline and Vitol guy is willing to sell it at $2 after buying it for $1 from a Texan oil company.
Now the Vitol guy will work with Sri Lankans to manage the intricacies of shipping it out from Texas (just one example of an oil location) to Sri Lanka. While being shipped out, the Vitol guy shorts gasoline futures as a hedge.
Once gas arrives at a Sri Lanka harbor, gov pays Vitol and gas is unloaded.