Spot cargo

A spot cargo is a single shipment of a commodity, such as a tanker load of crude oil or LNG, sold for near-term delivery outside a long-term supply contract.

Most LNG and a meaningful share of crude oil move under long-term contracts agreed years in advance between a specific seller and buyer. A spot cargo is the alternative: a single shipment sold on its own, priced against the market at the time rather than a pre-agreed formula, and available to whichever buyer is willing to pay the going rate.

Spot cargoes give buyers flexibility to cover an unexpected shortfall and give sellers a way to place volume that is not already committed under contract. The share of trade done on a spot basis tends to grow when supply is plentiful and sellers are competing for buyers, and shrink when supply is tight and buyers prefer the security of a long-term deal. A tanker or VLCC carrying a spot cargo is booked for that one voyage rather than under a standing charter.