ICE says existing Dated Brent price assessments to remain valid to June 2022

London — The Intercontinental Exchange said Feb. 26 that crude futures and swaps contracts listed up to June 2022 and referencing the S&P Global Platts Dated Brent assessment in its current form would remain valid even after Platts switches to a new methodology for the assessment in July 2022.

ICE was responding to a Feb. 22 announcement by Platts that it will incorporate US WTI Midland crude oil in its Dated Brent assessments – used as a benchmark by the industry globally – and would also switch the entire assessment process to a Rotterdam delivered, or Cost Insurance & Freight (CIF) basis, both for July 2022 deliveries onward.

Such assessments are used as a reference for settling various types of crude oil futures contracts on the exchange.

In a circular, ICE said it was considering listing successor contracts referencing the new assessments that would exist in parallel to contracts referencing the current assessments.

It underlined that "existing Exchange contracts that reference the current Platts FOB-basis Dated Brent value will continue to settle against this assessment until June 2022. All existing maturities will remain available to trade."

"New maturities of existing Dated Brent related futures will continue to be listed, up to and including June 2022 where these have not yet been listed."

Platts' change of methodology is expected to increase the amount of traded crude covered by its assessments at a time of declining production of light sweet North Sea grades, as well as reflecting the reality of substantial US imports. It means an end to assessing Free on Board (FOB) contracts based on the loading point of North Sea grades.

ICE noted a number of outstanding contracts are set to mature beyond June 2022 and said: "These contracts, and any other existing contracts referring to the current Dated Brent assessment, will be settled after June 2022 using the FOB reference value for Dated Brent published by Platts."

Platts said Feb. 25 it would continue publishing an FOB reference value for Dated Brent, calculated as a net-back from loadings of the current Dated Brent grades, using a basket of Platts-assessed freight rates.

Platts Dated Brent price assessments have undergone a number of changes over time intended to ensure their relevance in changing market conditions. With the decline of UK fields such as Brent, a number of Norwegian grades have been added, most recently the Troll crude blend, in 2018.