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.