Fujairah Oil Storage Agreements: Throughput Fees, Product Losses, and the Terminal’s Lien

The Fujairah Oil Industry Zone hosts eighteen oil terminals with storage capacity in the region of 70 million barrels, the largest commercial storage capacity for refined products in the Middle East. Traders, refiners and bunker suppliers rent that capacity under storage agreements, sometimes called tankage or terminalling agreements. The agreement is a commercial contract, so its wording decides the outcome of a dispute.

Three questions cause the largest claims. The first is money: the customer pays for capacity whether it uses it or not, and the minimum commitment survives a fall in trading volumes. The second is product: the terminal measures what goes in and comes out, and the contract sets how much loss the customer must absorb. The third is control: a terminal owed money can refuse to release product, and a bank that financed the product will want to know who has priority.

• Storage fees are fixed. The customer pays for the capacity reserved, per cubic metre and per month, whether the tanks are full or empty.
• Throughput has a floor. A minimum throughput commitment leads to a shortfall fee where the customer moves less product than agreed.
• Losses within the allowance fall on the customer. The contract sets a loss allowance, and the terminal answers only for losses above it or caused by its fault.
• The terminal’s figures decide quantity. Shore tank measurements, verified by an independent inspector, are the reference for receipts, deliveries and stock.
• The lien is a contractual weapon. A terminal can hold product against unpaid fees under the lien clause, and that right can conflict with a lender’s security over the same product.
• Force majeure was tested in 2026. The strikes on Fujairah in March and May 2026 showed how suspension, insurance and removal rights work in practice.

Who this applies to

This applies to oil traders, refiners, bunker suppliers and fuel distributors that store product in Fujairah, and to the terminal operators that rent capacity to them. It also concerns banks and trade finance lenders whose security depends on product held in third-party tanks, and inspectors and shipowners involved in transfers. It is relevant across the energy and maritime and logistics sectors.

Our commercial lawyers in Dubai negotiate storage agreements for traders and terminals, advise lenders on tripartite arrangements, and act in disputes over losses, unpaid fees and detained product. This article covers storage agreements. Our article on crude and refined product trading contracts covers the sale contracts that move product in and out of the tanks.

The legal framework

• The storage agreement itself. The contract sets the fees, measurement, liability, lien and termination terms, and it chooses the governing law and the court or tribunal for disputes.
• Federal Decree-Law No. 50 of 2022 on Commercial Transactions. The Commercial Transactions Law treats public warehouse activities and pledges over goods deposited in them as commercial activities, and it regulates commercial deposit and warehouse receipts.
• Federal Decree-Law No. 25 of 2025 issuing the Civil Transactions Law. The new Civil Code, published on the UAE legislation portal, took effect on 1 June 2026. It supplies the general rules on deposit, the right of retention, force majeure under Article 236 and hardship under Article 224 for agreements concluded from that date.
• Industry measurement standards. Terminals and inspectors measure product under recognised standards, such as the API Manual of Petroleum Measurement Standards, which storage agreements adopt by reference.

The administering bodies:

• The Fujairah Oil Industry Zone. FOIZ develops and regulates the hydrocarbon industry in Fujairah and allocates land to terminal operators.
• The Port of Fujairah. It manages the berths, jetties and marine services through which product enters and leaves the terminals.

The supervising courts:

• The courts of Fujairah and the arbitral tribunals chosen in the contract. They decide claims for fees, losses and wrongful detention, and they order the sale of product where a lien is enforced through the courts.

Fees and minimum commitments

The fee structure decides how much the customer pays in a slow market. Terminals price it to protect their revenue, and customers should model it against their worst trading year.

Storage and throughput fees

The storage fee is charged per cubic metre of reserved capacity per month. It is payable whether or not the customer uses the tanks. The throughput fee is charged per unit of product moved in or out. Agreements set an annual or monthly throughput allowance included in the storage fee, with an excess throughput fee for volumes above it.

Minimum throughput and shortfall

A minimum throughput commitment requires the customer to move a set volume each period. Where it moves less, it pays a shortfall fee. The customer should check whether the shortfall is measured monthly or annually, and whether volumes above the minimum in one period can be carried forward.

Ancillary charges

Heating, blending, inter-tank transfers, additive injection and tank cleaning are charged separately. A trader that plans to blend product in the tanks should agree the rates and the terminal’s obligations before signing, including who bears the risk of an off-specification blend.

Escalation and surcharges

Long-term agreements adjust fees by an index or a fixed annual percentage. Since the 2026 strikes, terminals have also sought to pass on higher insurance costs. The customer should limit surcharges to those the contract expressly allows.

Measurement, losses and contamination

The storage agreement turns the physical movement of oil into numbers. The clauses on measurement and losses decide who pays when those numbers do not match.

Segregated and commingled storage

In segregated storage, the customer’s product is held in dedicated tanks and keeps its identity. In commingled storage, product of the same grade from several customers is held together, and each customer is entitled to a share. The customer should confirm that it keeps title to its share and that losses in a commingled tank are allocated in proportion to each customer’s stock.

Measuring receipts and deliveries

The contract names the reference figure for each movement, which is the shore tank measurement in a standard terminal agreement. An independent inspector, appointed jointly or by the customer, witnesses the gauging and sampling. Differences between ship figures and shore figures are a matter for the sale contract and the charter, but the storage agreement fixes what the terminal holds for the customer.

The loss allowance

Every agreement sets a loss allowance, a small percentage of the product handled that covers evaporation and measurement tolerance. Losses within the allowance fall on the customer. Losses above it are the terminal’s responsibility only where the contract makes them so, and some agreements also require proof of the terminal’s fault. The customer should check how the allowance is calculated, whether it applies per movement or across a period, and the time limit for claims.

Contamination

The terminal is responsible for keeping product within the specification at which it was received, subject to the exclusions in the contract. Disputes turn on samples taken at receipt and at delivery. A customer that does not insist on sealed, retained samples at each transfer will struggle to prove where contamination occurred.

Liability and insurance

The terminal’s liability is capped and limited by exclusions. The customer should compare the cap with the value of the product it will hold at peak stock.

Caps and exclusions

Agreements cap the terminal’s liability per incident and per year, and exclude indirect losses such as lost trading profit, demurrage and price movements. A cap fixed when oil prices were low may cover only part of a full tank when prices rise. The customer should negotiate a cap linked to the value of product held, or insure the gap.

Who insures the product

The customer insures its own product against loss and damage, and the terminal insures its facilities and its liability. Our article on warehouse liability for damaged or lost goods covers the general rules on a depositary’s duty of care and the burden of proof.

The terminal’s lien

The lien is the terminal’s main protection against an unpaid customer. It is also the clause that causes the hardest disputes, because the product held can be worth far more than the fees owed and may be pledged to a bank.

The contractual lien

The storage agreement gives the terminal the right to refuse to release product until fees are paid. The scope varies. A narrow lien secures only fees for the product held. A wide lien secures all sums due under the agreement, and sometimes under other agreements with the same customer, over all product in the terminal. The customer should limit the lien to fees for the product in question and to undisputed amounts.

The statutory right of retention

UAE law also gives a party that holds property for another a right of retention, which allows it to withhold the property until a debt connected with it is paid. The Civil Code supplies the general rule, and the Commercial Transactions Law contains specific rules for commercial deposits and agents. The statutory right supports the contractual lien, but it does not extend the lien to debts unconnected with the stored product.

Enforcing the lien

Holding product is one step and selling it is another. A terminal that wants to sell detained product to recover its fees should do so through the courts, or strictly under a sale procedure in the contract. Either way, it should give notice to the customer and to any lender. A sale outside those routes exposes the terminal to a claim for the full value of the product. Our guide to recovering unpaid trade debts covers the court routes, including precautionary attachment.

Bank financing and tripartite agreements

Traders finance stored product through banks that take security over it. The storage agreement must fit that security, or the lender’s position is weaker than it believes.

Tank receipts and holding certificates

The terminal issues a tank receipt or holding certificate confirming the volume and grade held for the customer or to the order of the bank. The bank relies on it to release funds. A receipt that misstates quantity, or that the terminal issues without checking stock, exposes the terminal to a claim from the bank. Our guide to letters of credit in cross-border trade covers the documentary side of trade finance.

The tripartite agreement

A tripartite agreement between the terminal, the customer and the bank sets who can instruct releases and whether the terminal waives or subordinates its lien. It also sets what happens if the customer defaults or becomes insolvent. A bank should not lend against product in a Fujairah tank without one. The terminal will agree to subordinate its lien only for fees above an agreed level, or in return for direct payment of fees by the bank after default.

Insolvency of the customer

The collapse of a trading house leaves the terminal, its lenders and its suppliers competing for the same product. The contract, the tripartite agreement and the evidence of title decide the order. The 2020 restructuring of GP Global, followed by litigation over the sale of its Fujairah terminal, showed how long these disputes can last.

Sanctions, force majeure and the 2026 strikes

Two risks have moved from the margins of storage agreements to the centre since 2025.

Sanctions screening

Terminals screen the origin of product and the parties involved, and they refuse to receive or release product that would breach sanctions. The agreement should allow the terminal to suspend performance where a transaction would breach applicable sanctions, and it should set what happens to product already in the tanks. Our article on sanctions for UAE fuel and oil traders covers screening obligations.

Force majeure after the strikes

On 3 March 2026, debris from an intercepted drone caused a fire at a storage facility in the Fujairah zone. On 4 May 2026 a further strike started a fire at an oil facility and injured three workers. Terminals suspended operations, and customers asked whether fees remained payable and whether they could remove product. The answers depend on the force majeure clause, and for agreements concluded from 1 June 2026, on Article 236 of the new Civil Code. Our article on force majeure in UAE supply and construction contracts covers the legal test.

Removal at the end of the term

At expiry or termination, the customer must remove its product within the period in the contract. If it does not, the terminal charges holdover fees and may seek to sell the product. The customer should negotiate a removal period that reflects the time needed to arrange a vessel, and the terminal should set out a sale procedure with notice.

Common mistakes in storage agreements

Booking capacity on optimistic volumes. A minimum throughput commitment set in a strong market leads to shortfall fees when trading slows.

Not retaining samples. A customer without sealed samples from each transfer cannot prove where contamination occurred.

Accepting a cap below the value of product held. A liability cap fixed at a low figure leaves the customer uninsured for the rest of a full tank.

Leaving the lien unlimited. A lien over all product for all sums allows the terminal to hold a full cargo against a disputed invoice.

Lending without a tripartite agreement. A bank that relies only on a tank receipt may find the terminal’s lien ranks ahead of its security.

Selling detained product without a court order or contract procedure. A terminal that sells product informally risks a claim for its full value.

What traders and terminals should do next

• Model the fees. Test the storage fee and minimum commitment against a low-volume year.
• Fix the measurement rules. Name the reference figure, the inspector and the sampling procedure for each transfer.
• Check the loss allowance and time bar. Confirm how losses are calculated and diarise the claims deadline.
• Align the cap with product value. Negotiate a cap that tracks the value at risk, or insure the gap.
• Limit the lien. Restrict it to fees for the stored product and to undisputed sums.
• Put a tripartite agreement in place. Agree lien subordination, release instructions and default procedures with the bank.
• Review the force majeure and removal clauses. Set what happens to fees and product when the terminal cannot operate and at the end of the term.

How should traders and terminals structure a Fujairah storage agreement?

A Fujairah storage agreement is a commercial contract that allocates three risks: the cost of reserved capacity, the loss or contamination of product, and control of product when money is owed. The customer pays storage fees regardless of use and absorbs losses within the allowance. The terminal answers for losses above the allowance and holds a lien that can stop product leaving the tanks.

The main risk lies where the lien meets financing. A terminal with an unlimited lien and a bank with security over the same product will dispute priority the moment a customer defaults. The outcome depends on the tripartite agreement and the evidence of title.

The commercial consequence is that the documents agreed at the start decide who carries the loss when a trader fails, a tank is contaminated or the terminal cannot operate. Parties that negotiate the measurement, liability, lien and removal clauses with those events in mind can resolve them quickly. Parties that sign a standard form without review may find the loss falls on them.

For traders, terminals and lenders, our corporate and commercial team advises on storage and tripartite agreements, lien and loss disputes, and the recovery of product and fees in Fujairah.

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