Asian refiners are beginning to switch to pricing U.S. crude oil purchases against
global benchmark ICE Brent instead of Dubai after the Middle
East marker spiked to record levels this month, three refining
and trade sources said on Friday.
The move could reduce liquidity for the West Asia
benchmark in the derivatives market as traders shift hedges to
ICE Brent, one of them said.
Asian buyers have just begun booking U.S. crude cargoes for
delivery in July this week, he said, adding that Japanese
refiner Taiyo Oil bought 2 million barrels of U.S. light crude
via a tender at about $19 a barrel above ICE Brent for July
delivery. The Japanese refiner, which typically buys WTI crude
pegged against Dubai prices, declined to comment.
Other Japanese refiners have also purchased U.S. crude
priced against ICE Brent instead of Dubai, the same source said.
Details of those deals were not immediately available as they
were done through private negotiations, he said.
Dubai spiked to an all-time high of $169.75 last week
surpassing Brent, making Middle East supply the most
expensive oil in the world, as the amount of crude available for
trading fell after S&P Global Platts excluded three of the five
crude grades in anticipation of a prolonged disruption to
shipping via the Strait of Hormuz.
Robust demand from French major TotalEnergies has
supported Dubai prices.
Following the market volatility, some Asian refiners had
requested that the world’s top exporter Saudi Aramco
change its benchmark to ICE Brent from Platts Dubai, traders
said.
Saudi Aramco could not be immediately reached for comment
outside office hours.