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TSR, TSA & Tank Storage Agreements Explained in Oil & Gas Trading


Introduction

In international oil & gas trading, not all products move directly from refinery to vessel. A significant volume of petroleum products is stored temporarily at licensed oil terminals before delivery.
This is where Tank Storage documentation becomes critical.

Three commonly referenced but often misunderstood documents are:
  • TSR (Tank Storage Receipt)
  • TSA (Tank Storage Agreement)
  • Tank Storage Agreements
This article explains what each document means, their real function, and how they fit into compliant oil & gas transactions.
 
What Is a Tank Storage Receipt (TSR)?

Tank Storage Receipt (TSR) is a document issued by a licensed storage terminal confirming that a specified quantity of petroleum product is stored in a particular tank.

What TSR Confirms
  • Product type and quantity
  • Tank number and terminal location
  • Storage status at a specific date
Important Clarification

TSR:
  • ❌ Does not prove ownership
  • ❌ Is not a title document
  • ❌ Cannot be used alone for payment or cargo release
TSR is operational evidence of storage, not commercial entitlement.

What Is a Tank Storage Agreement (TSA)?

Tank Storage Agreement (TSA) is a legally binding contract between:
  • The terminal operator, and
  • The storage user (seller or authorized party)

What TSA Covers
  • Storage duration
  • Storage fees and terms
  • Access rights
  • Safety, loss, and liability clauses

A valid TSA confirms that the party offering the product has contractual rights to use the storage facility.
 
Tank Storage Agreement vs Ownership

A common misconception in oil trading is that:

“If there is a TSR or TSA, the buyer owns the product.”

This is incorrect.

Ownership is determined by:
  • Sales & Purchase Agreement (SPA)
  • Banking instruments (LC / SBLC)
  • Transfer of title clauses
TSR and TSA support operations, but do not replace commercial contracts.

How TSR & TSA Fit into a Compliant Transaction

In a legitimate transaction flow:
  1. SPA is signed
  2. LC or SBLC is issued and activated
  3. TSA confirms storage rights
  4. TSR confirms product is physically stored
  5. Delivery method (TTV / TTT / STS) is executed
  6. Inspection and marine documentation follow
This structure ensures oil trade compliance and banking acceptance.

Banking & Compliance Perspective

Banks recognize TSR and TSA only when:
  • They are issued by licensed terminals
  • They are verifiable
  • They are consistent with SPA and banking terms
Banks do not release funds based solely on TSR or TSA.
 
Common Red Flags Buyers Must Watch For
  • 🚩 “TSR available before LC”
  • 🚩 “Ownership guaranteed by TSA”
  • 🚩 Refusal to provide SPA
  • 🚩 No terminal verification
  • 🚩 Storage documents used as POP
These indicate non-compliant or misleading offers.

Why Buyers Must Understand TSR & TSA

Understanding storage documentation helps buyers:
  • Avoid false ownership claims
  • Protect banking position
  • Distinguish real terminal-backed deals from paper deals
TSR and TSA are supporting documents, not deal-closers.

Conclusion

TSR, TSA, and Tank Storage Agreements are essential operational documents in oil & gas trading, but they must be used within the correct commercial and banking framework.

When understood properly, they enhance transparency, logistics planning, and compliance—but when misused, they are a major source of confusion and risk.

👉 This completes the core documentation series in our Ultimate Guide to Oil & Gas Shipping & Marine Documentation.