Saudi plans first change in Asia crude oil price formula in decades, to use DME Oman | Reuters

SINGAPORE (Reuters) – Saudi Aramco plans to change the formula used to price its long-term crude oil sales to Asia starting from October, marking the first change in benchmarks for its official selling prices (OSP) since the mid-1980s, the company said on Wednesday.

Trade sources had earlier told Reuters of the planned change.

The new formula will be based on the average monthly prices of Oman crude futures traded on the Dubai Mercantile Exchange (DME) and the average cash price for Dubai assessed by pricing agency S&P Global Platts, instead of the average of Oman and Dubai prices assessed by Platts, Aramco said.

Saudi Aramco’s OSPs for October will be based on the average settlement prices for the DME December Oman contract and the December Dubai cash price assessed by Platts, both of which are set in October.

S&P Global Platts said in a statement that it respected each market participant’s right to decide its preferred way of pricing term contracts, but that the market decides which price references are ultimately adopted as benchmarks.

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Saudi plans first change in Asia crude oil price formula in decades, to use DME Oman | Reuters.