Oil pricing agency S&P Global Platts plans to adjust the way it calculates the price of North Sea dated Brent by reflecting cargo offers on a delivered basis, its latest move to ensure enough supply underpins the global price benchmark.
A steady decline in crude production from the North Sea has led to concern that output could become too low and hence could be accumulated by just a few players, making the benchmark vulnerable to manipulation.
Platts said on Monday that it plans to reflect offers of BFOE cargoes made on a cost, insurance and freight (CIF) basis in the dated Brent price benchmark as of Oct 1 2019. “Allowing offers for these crudes on a CIF basis in Northwest Europe will enable the inclusion of a greater amount of market data in the North Sea’s light sweet crude oil benchmark,” Platts said in a statement.
Dated Brent is based on five British and Norwegian North Sea crudes – Brent itself, Forties, Oseberg, Ekofisk and Troll, or BFOE as they are known. The price – used in oil deals around the world – is set by the cheapest grade.