Gulf Oil and Gas accountACCOUNT

Saudi Arabia to Switch Crude Oil Pricing for European Refiners

Source: Bloomberg 4/4/2017, Location: Middle East

Saudi Arabia is to tweak the benchmark it uses to sell its crude in Europe, in a concession to refiners in the region that have long complained about their ability to hedge using the current measure.

Saudi Arabian Oil Co., as the country’s state-owned company is formally known, will sell crude into Europe, Africa and Latin America based on ICE Brent Settlement, a one-day close for the benchmark, rather than the current system of using the daily weighted average of Brent trades. Both are published by ICE Futures Europe Ltd.

In a letter to European customers, Aramco said the "change is expected to provide substantive benefits, including allowing our customers to closely hedge crude purchases". The move is effective July 1 and follows consultations with customers, according to a letter obtained by Bloomberg News.

European refiners have long complained that the use of a weighted average makes hedging their exposure to the benchmark difficult, forcing them to sell and buy multiple times during the day to mirror changes in volumes.

Saudi Aramco follows Kuwait in abandoning the weighted average price, known in the industry as Bwave. Iran continues to price its crude into Europe using Bwave but in the past it has mirrored moves made by Saudi Arabia.

“Saudi Arabia is confident that this enhancement will continue to provide a transparent, reliable and liquid market serving both parties,” the company wrote.

Financials and Investment News in Saudi Arabia >>

China >>  6/10/2019 - ENOC Group has secured a five-year US$690 million term loan from a Chinese consortium of banks as China’s biggest financial institutions endorse the G...
Australia >>  5/30/2019 - Wood and NERA (National Energy Resources Australia) have announced a new funding partnership arrangement led by Wood, in collaboration with the Univer...

United Kingdom >>  5/26/2019 - The Board of Directors of Atlantic Petroleum has agreed with NASDAQ for a temporary suspension of the company’s shares. The Company advises that Graem...
Morocco >>  5/22/2019 - Sound Energy, the Moroccan focused upstream gas company, is pleased to provide an update on its strategy and operations. ...

Georgia >>  5/17/2019 - AIM-listed Block Energy, the exploration and production company focused on the Republic of Georgia, has completed a placing of 109,090,000 new Ordinar...
Saudi Arabia >>  5/17/2019 - Marubeni Corporation (hereinafter “Marubeni”) is pleased to announce that in April 2019, Shuqaiq Three Company For Water, owned by Marubeni, Acciona ...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


Saudi Arabia Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 |

More News

Related Links

Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.