An oil broker arranges contracts for the purchase or sale of crude oil, or negotiates future's contracts. In order to become an oil broker an individual must typically graduate from high school and complete an undergraduate degree program. Additionally, due to the nature of the work many firms require applicants for these roles to have prior sales or finance related experience. In many locations, someone wishing to become an oil broker may also have to pass a series of licensing examinations.
While the price of a barrel of oil can change throughout the day, transactions involving oil future's contracts are more complex because the sales prices in the transactions are based upon projections of future price movements. Consequently, anyone who plans to become an oil broker must have a good grasp of mathematics and the ability to process significant amounts of information within a short period of time. Many firms attempt to fill these roles with college graduates who have completed degree courses in finance, economics or related topics. Some companies even require applicants for these jobs to have completed masters or doctorate degree programs in mathematics related topics.
The trading of oil and other types of commodities is heavily regulated in many areas and anyone wishing to become an oil broker must attend a series of training classes during which sales practices, disclosure requirements and securities laws are taught. Generally, the process ends with an examination; prospective brokers must achieve a minimum score on this test in order to become eligible to apply for a trading license. The qualified applicants may then have to pass a background-screening test before seeking employment.
Successful brokers need to have strong sales skills; many firms prefer to fill these positions with workers who have previously worked in insurance, banking or stock trading. In many nations, oil trading takes place at commodities exchanges and only the leading brokerage firms and independent traders have the right to transact at these locations. Someone wishing to become an oil broker may have to spend some time working at another type of commodity exchange, as many investment firms only hire brokers who have previously worked in these types of environments. In the absence of such prior experience, someone who worked as an administrative assistant or sales associate for a trader may be able to apply for one of these roles.
Aside from academic credentials and experience, brokers often need to have certain other skills and attributes. Trading in many areas is mostly conducted online in which case some firms only hire people who have completed short-term computer training classes. Additionally, people who deal with oversees clients may need to have second language skills.
Frequently Asked Questions
What is an oil broker?
An oil broker is a specialist who acts as a middleman between buyers and sellers of oil products, such as crude oil, gasoline, and other petroleum products. Oil brokers aid in contract negotiations and transaction facilitation between buyers and sellers.
What qualifications are required to become an oil broker?
While there are no official qualifications needed to become an oil broker, a background in business, finance, or economics may be helpful. Many oil traders have degrees in one of these fields or have previous experience working in the oil sector.
What skills are necessary to be a successful oil broker?
Successful oil brokers must have strong bargaining skills, excellent communication talents, and the ability to build and maintain client relationships. They must also be knowledgeable about the oil market and the factors that might affect oil prices. Those who work with customers from other countries may also need to speak a second language.
What is the salary range for oil brokers?
As of April 2021, an oil trader in the United States made an average yearly pay of $82,000, according to Payscale. Depending on their level of experience, the size of the company they work for, and the demand for their services, oil brokers may earn a wide range of wages.
How can I begin my career as an oil broker?
Starting a career as an oil broker might benefit from prior experience working in the oil industry or a similar field, such as finance or business. Many oil dealers start out in entry-level positions and advance through the ranks. Establishing an industry network and keeping up with developments and changes in the oil sector may also be advantageous. Moreover, certain brokers may choose to apply for accreditation from organizations like the National Association of Securities Dealers (NASD) or the Financial Industry Regulatory Authority (FINRA) (FINRA).