What is Platts Dubai?
The term 'Platts Dubai' refers to the physical price of Dubai crude oil loading through the month of assessment. Alternative crude’s Oman and Abu Dhabi’s Upper Zakum are also deliverable into the Platts Dubai contract, under a mechanism known as alternative delivery.
The Dubai price is the primary physical market pricing reference for crude oil delivered to Asian refineries from the Middle East Gulf, and has been since the 1980s. With deep markets available for hedging, and a solid track record as the sour crude benchmark of choice East of Suez, Dubai’s influence and importance has grown across the years.
Since the start of this decade, the Platts Dubai benchmark has also become the pricing reference for cargoes of crude oil sold from Russia’s East Siberian port of Kozmino to refiners -- oil used extensively across the Asia-Pacific region, including the US West coast.
Brent and Dubai are the most widely used benchmarks worldwide for physical crude oil price, are closely correlated, and underpinned by several million barrels per day (b/d) of Brent/Dubai derivative spread trades. Typically, the sweet Brent crude oil benchmark trades at a premium to the sour Dubai crude benchmark.
Total production of Dubai, Oman and Upper Zakum is around 1.6 million b/d. This compares to one million b/d underpinning the North Sea Brent benchmark BFOE. Typically, more than one million b/d of Dubai, Oman and Upper Zakum are available to be freely traded in the market.