CBL International Ltd

Obligations and Commitments

As part of our risk management program, we enter into derivative instruments intended to mitigate risks associated with changes in commodity prices. Our obligations associated with these derivative instruments fluctuate based on changes in the fair value of the derivatives. See Note 4.

The Company uses derivative financial instruments to manage its exposure to market price fluctuations in future contracts which are classified as non-designated derivatives. The Company has not applied hedge accounting to these instruments as the hedging relationship is not highly effective and the change in fair value of these derivatives is recorded within cost of revenue. The Company presents its derivative assets and derivative liabilities as a separate item on the consolidated balance sheets. The Company does not enter into derivative contracts for speculative or trading purposes. As part of our risk management program, we enter into derivative instruments intended to mitigate risks associated with changes in commodity prices. See Note 4. In our normal course of business, we fix purchase commitments associated with our risk management program, as well as purchase contracts with our suppliers, under which we agree to purchase a certain quantity of marine fuel at future market prices.

We entered into lease arrangements for offices used for our operations. For details, see Note 11 Leases of the Unaudited Interim Financial Statements.