Eastward Shifting Oil Markets and the Future of Middle Eastern Benchmarks
The factors underlying the current eastward shift of international oil markets
The recent increased Chinese activity in the Platts Dubai window is yet another manifestation of the eastward shift of international oil markets. In light of these changing dynamics, the necessity for a new marker for East of Suez crude oil pricing is commonly taken for granted. But must the benchmark for East of Suez necessarily move to Asia, or may strengthening the Middle Eastern benchmark system offer a feasible alternative? To answer this question, this comment briefly examines the factors underlying the current eastward shift of international oil markets. Subsequently, two candidates for an Asian marker for East of Suez will be presented briefly (ESPO Blend, Shanghai Crude Oil Futures Contract). ….