DHAHRAN, July 04, 2018
Saudi Aramco announced that it is adjusting its Asia crude oil pricing marker in an effort to increase the overall reliability of its crude oil pricing.
Saudi Aramco’s long-standing price marker was the average of Platts Dubai and Platts Oman assessments. The company’s new Asia marker will replace Platts Oman with Dubai Mercantile Exchange (DME) Oman effective October 1, 2018, creating a hybrid between two major Asia benchmarks.
Ahmed Subaey, Saudi Aramco’s vice president of Marketing, Sales and Supply Planning said, “We’re rebalancing our Asia marker to ensure that it is underpinned by a broad and vibrant marketplace. The inclusion of the DME Oman price complements the existing Platts Dubai price to provide our customers with better visibility into price dynamics. Our main objective is to ensure that our marker is market-reflective, well-regulated, and predictable, and we are confident that the DME Oman price, combined with the Platts Dubai price will serve that purpose.”
DME WELCOMES GROWING USE OF OMAN BENCHMARK
Dubai, UAE, 4 July, 2018 - Dubai Mercantile Exchange (DME), the premier international energy futures and commodities exchange in the Middle East, welcomes the announcement earlier today of Saudi Aramco’s commitment to use the DME Oman crude oil benchmark in its Asian pricing formula.
“We are delighted with the decision of Saudi Aramco to switch part of their pricing formula to the DME Oman Crude Oil Futures contract,” said Ahmad Sharaf, Chairman of DME. “Saudi Aramco’s announcement is a powerful recognition of the DME’s Oman Crude Oil Futures contract as the most efficient and transparent price discovery and risk management tool for the regional crude oil market.”
The DME Oman crude oil benchmark is currently used to establish the price of crude oil produced in the Sultanate of Oman and in the Emirate of Dubai, underpinning approximately 1 million barrels per day of production. Today’s announcement by Saudi Aramco adds significant further physical price exposure to the Exchange.
DME Oman Crude Oil Futures was launched in 2007 and since then has grown in its global status and influence. The settlement price of DME Oman is established in a regulated, highly liquid and transparent five-minute window by up to 100 participants each day.
“DME was launched with a mandate to serve the Middle East and Asian oil markets. We value the confidence and trust placed in us by Saudi Aramco and look forward to continuing to provide the region and its customers with one of the world’s most robust oil price benchmarks,” Sharaf said.