According to sources, the Saudi Arabian National Oil Company (Saudi Aramco) plans to change the pricing consensus on the supply of long-term crude oil to Asia from October and will set the pricing benchmark for the first time since the mid-1980s.
The new formula will be based on the average monthly price of Oman crude oil futures traded on the Dubai Commodity Exchange (DME) and the average spot price of Dubai crude oil provided by S&P Global Platts, the international oil pricing assessment agency, with a reference ratio of 50:50. Previously, due to the lack of crude oil pricing power in Asian countries, the crude oil sold to the Asian region in the Middle East was based on the average price of Oman and Dubai, which were fully evaluated by Platts.
People familiar with the matter said that Saudi Aramco’s move is to boost the trading volume and liquidity of Oman crude oil futures. DME launched Oman crude oil futures in 2007, becoming the most liquid Middle East physical delivery crude oil futures. In contrast, during the Platts closing price assessment, there was very little buying and selling of Oman cargo.