Price Assessment

Dubai Crude Oil Price Assessment

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

What is Platts Dubai?

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The term 'Platts Dubai' refers to the physical price of Dubai crude oil loading through the month of assessment. Alternative crudes Oman, Upper Zakum, Al Shaheen or Murban are also deliverable into the Platts Dubai contract, under a mechanism known as alternative delivery.

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The Dubai price is the primary physical pricing reference for crude oil loading from the Middle East Gulf, Far East Russia and other parts of the world to refiners and has been since spot markets first emerged in the 1980s. With deep financial markets available for hedging using Platts Dubai as a settlement, Dubai's influence as the world's leading reference price for all medium sour crude oil has grown through the years.

The Platts Dubai benchmark is also the pricing reference for cargoes of crude oil sold from Russia's Far East ports to refiners across the Asia-Pacific region as well as the US West Coast.

As one-half of Brent/Dubai spreads, Platts Dubai also provides the key barometer for understanding the relative value of sweet and sour crude oil, which is the very engine that drives which crude oil, from which countries, moves through the global oil refining system.

Total production of Dubai, Oman, Upper Zakum, Al Shaheen and Murban is more than 3.5 million b/d of crude production. This compares to around 750,000 b/d underpinning the North Sea Brent benchmark BFOE.

How do we assess Platts Dubai?

Platts Dubai and Platts Oman assessments reflect the repeatable, transactable price of Dubai and Oman crude oil for loading two, three and four months ahead of the assessment date. Platts considers bids, offers and trades for full and partial cargoes of crude oil in these benchmarks, with a large amount of flat-price activity reported in sizes of 25,000 barrels, with physical convergence at 500,000 barrels, or 20 partials to a full cargo.

Platts Dubai assessments reflect the value of Middle East sour crude oil, where the buyer is willing to accept delivery of Dubai crude itself, or alternative delivery of Oman, Upper Zakum, Al Shaheen, or Murban, at the seller's option.

Platts Oman assessments reflect the value of Middle East sour crude oil, where the buyer is willing to accept delivery of Oman itself, or alternative delivery of Murban, at the seller's option. In all cases, cargoes must be free of any restrictions or limitations placed on the buyer, such as resale or destination clauses.

Both Platts Dubai and Platts Oman are assessed on a Market on Close assessment process basis at 16:30:00 Singapore time.

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.

Following extensive feedback and market engagement, Platts has progressively included additional grades into the Middle East crude benchmarks, with Qatar's Al Shaheen crude and Abu Dhabi's Murban crude the latest grades added from January 2016.

In July 2016, Platts introduced a Quality Premium (QP) for Murban crude oil delivered into its Middle East crude oil assessment processes for cargoes nominated from September 2016 onwards.

The QP is paid by a buyer to a seller for the nomination and delivery of a cargo of Murban crude oil into a physical convergence of Dubai, Oman, Al Shaheen or Upper Zakum. Platts announces the Murban QP on the first publishing day of each month, two months prior to the QP coming into effect.

The QP is set at 60% of the net price difference between Platts front-month cash Murban assessment and Platts front-month cash Oman assessment during the full month prior to announcement. A QP of zero will be announced if 60% of the observed price difference between the grades is less than the minimum threshold of 50 cents/b.

The minimum threshold was raised in April 2020 to 50 cents/b from 25 cents/b previously after extensive market consultation, following an unprecedented narrowing of the relative value of Murban compared with other grades in the Oman and Dubai baskets.


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