Price Assessment

Dated Brent Price Assessment

  • Brent Benchmark Complex: Evolving necessity
  • What is Dated Brent?
  • How we assess Dated Brent
  • Evolution of Dated Brent: a brief history of major changes

Brent Benchmark Complex: Evolving necessity

The Brent Benchmark Complex consists of the world's most important physical and financial crude oil benchmarks.

Instruments in the Brent complex are used around the world in a variety of ways. Dated Brent is not just a bellwether for the oil markets but a price reference in physical term and spot deals daily. National oil companies refer to Brent in their official selling prices every month, governments manage taxes and royalties with it, while the benchmark sits at the heart of floating spot pricing, tender contracts around the world, long-term strategic planning and shorter-term product cracks. Beyond the world of oil, Brent is also an essential component of managing price exposure in other commodity markets, like LNG and pipeline gas, while movements in Brent futures inform the broader understanding of the health of the world economy itself.

The Brent futures market allows fast, easy access for hedging or investment, while physical forwards and weekly contract-for-difference (CFD) swaps help market participants manage their price risk and physical exposure on light, sweet crude in the global markets.

S&P Global Commodity Insights and ICE each understand the importance of changes to the Brent Benchmark Complex. This paper outlines a common set of questions on the evolution of the complex. Commodity Insights and ICE will publish consultation notices through their respective Subscriber Notes and Circulars channels to solicit feedback.

What is Dated Brent?

Platts Dated Brent is a benchmark assessment by S&P Global Commodity Insights of the price of physical, light North Sea crude oil. The term "Dated Brent" refers to physical cargoes of crude oil in the North Sea that have been assigned specific delivery dates.

Each dated cargo of crude oil is often traded more than once as it makes its way to delivery to refineries -- where crude is transformed into products like gasoline, diesel, jet fuel, and more.

Our analysis of trading activity culminates in the publication of the Platts Dated Brent benchmark --our daily assessment of the price of Dated Brent in the North Sea crude marketplace.

Dated Brent is a critical component of the Brent Complex, which includes the trading of physically delivered oil like Dated Brent and cash BFOE (Brent-Forties-Oseberg-Ekofisk), as well as financially settled derivatives like Brent Futures, Contracts for Differences (CfDs), Dated-to-Frontlines (DFLs) and a variety of other derivatives.

Taken as a whole, the Brent Complex helps those active in the North Sea crude market to manage the flow of crude oil from well-head to refinery, and manage price risk along the way - not just in crude oil, but also for correlated refined oil products, natural gas, gas liquids and condensates.

Price indicators from the Brent Complex are increasingly used as a reference for measuring the value of crude oils all around the world, and often of global economic health itself.

How we assess Dated Brent

We assess the price for dated crude streams in the North Sea - Brent Ninian Blend (from which Dated Brent takes its name), Forties Blend, Oseberg and Ekofisk. Taken together, these four crudes represent a robust supply of approximately 1 million oil barrels per day of production.

The most competitive grade of crude defines the final printed price of our Dated Brent assessment each day.

Our Dated Brent price assessment reflects the tradable, repeatable spot market value of the most competitive grade at 16:30.00 London time precisely.

We publish bids, offers, expressions of interest to trade, and confirmed trades during our Market on Close assessment process every day. This information is summarised in our daily newsletters and is published in full on our real-time information service, Platts Global Alert.

Evolution of Dated Brent: a brief history of major changes

We began assessing Dated Brent in the 1980s, reflecting the value of crude to be delivered between seven and 15 days after the date the price assessment was published. As production volumes of the Brent field decreased, we included other crude oils into our Dated Brent assessment.

Trading has trended further forward in time, and over the years we have moved our assessment periods to keep pace with this trend.

In 2002, we added two more crude grades to our physical Brent assessment process -- Forties and Oseberg. In the same year, we widened the date range reflected in our assessments to 10-21 days forward, in order to better reflect the more forward-looking trading patterns of the North Sea crude market and increase potentially deliverable volumes.

In 2007, we added Ekofisk crude into our physical Brent assessment process, completing what is now known as BFOE.

In 2012, we again widened our assessed delivery period window, this time to 10-25 days forward, increasing the volume deliverable into the assessment window by more than 30%.

In 2015, we widened our assessed delivery period window further, this time to reflect 10 days to a full month-ahead forward, again increasing the volume deliverable into the assessment window by more than a further 30%.

Working with all stakeholders, we are constantly planning for more change to come as the market continues to evolve. We regularly hold methodology forums, technical workshops, webinars and one-to-one meetings to exchange views on the future of Brent.