Royal Dutch/Shell is reportedly using Dubai crude as a benchmark for pricing a cargo of U.S.-produced oil that it hopes to sell in Asia.
Citing trading sources and its own data, Bloomberg said on August 19 that Shell had offered the cargo of West Texas Intermediate/Midland-delivered crude during Asian hours on S&P Global Platts’ trading platform. Asian buyers will have a relatively easy time arranging for delivery, since Shell intends to send the oil to Singapore or to the Malaysian ports of Linggi or Nipah.
Shell’s use of the Dubai benchmark is significant because potential buyers will have an easier time comparing the U.S. oil to grades of similar quality that are widely used by Asian refiners. It is also well-timed, as Saudi Arabia and other Middle Eastern producers are currently reining in output in order to boost crude prices.