Saudi Arabia, the world’s top oil exporter, plans to change the way it prices oil for Europe from July, industry sources said, in an effort to increase the appeal of Saudi crude by making it easier for customers to hedge.
State oil giant Saudi Aramco will start pricing its European exports against the ICE settlement for the Brent benchmark after years of pricing its oil against the Brent Weighted Average (BWAVE), the sources said.
Both price references are part of the Brent benchmark used to price much of the world’s crude. The move, which takes effect on July 1, will allow buyers of Saudi crude in Europe to hedge better, the sources said.
“The Saudis are switching to the settlement as BWAVE is difficult to hedge,” said one industry source briefed on the matter who declined to be identified.
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