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Price Assessment

The Dubai Crude Oil Price Assessment

  • What is Platts Dubai?
  • How do we assess Platts Dubai?
  • Evolution of Platts Dubai

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.

How do we assess Platts Dubai?

Platts Dubai assessments reflect the repeatable, transactable price of Platts Dubai for the month of loading which are traded in lot sizes (partials) of 25,000 barrels, with physical convergence at 500,000 barrels, or 20 partials at 16:30:00 Singapore time precisely.

The Platts Dubai contract reflects the spot value of Middle East sour crude oil, where the buyer of Dubai has the obligation to accept delivery of Dubai, or alternative delivery of Upper Zakum or Oman, at the seller's option. Cargoes must be free of any restrictions or limitations placed on the cargo buyer, such as resale or destination clauses.

Platts Oman reflects the assessment of Oman crude oil. Both Platts Dubai and Platts Oman are assessed on a Market on Close assessment process basis.

Evolution of Platts Dubai

Platts began assessing price of Dubai crude oil in the early 1980's as a single grade. As Dubai crude production decreased, Platts in January 2002 incorporated Oman crude as an alternative for delivery into the Dubai partials mechanism. This was followed in February 2006 by Abu Dhabi's Upper Zakum crude as another alternative for delivery into the Platts Dubai partials mechanism.

On September 3, 2015, Platts opened a formal consultation regarding the possible inclusion of Qatar's Al-Shaheen and Abu Dhabi's Murban in the basket of crude oils reflected in its Dubai and Oman crude oil benchmarks, and the possible implementation of a Quality Premium for deliveries of Murban.

Following extensive feedback and market engagement, Platts on September 18 announced that it intends to move ahead with the proposed inclusion of Al Shaheen and Murban in its Dubai and Oman crude oil benchmarks, and will continue to review the potential inclusion of a Quality Premium for Murban.

Accordingly, Platts intends to reflect bids and offers for Dubai and Oman that reflect these new standards with effect from January 4, 2016, the first publishing day of the year. As a result, these standards will take effect for cargoes loading from March 2016, the prompt traded spot month in January 2016. January and February partials and cargoes will continue to be assessed under prevailing standards.

The full subscriber note announced on September 18 can be viewed here.

The full September consultation can be reviewed at here.

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