Trading of Middle East oil derivatives on a closely watched platform that helps set crude benchmarks and shape actual cargo flows has soared this month, highlighting a surge in activity that has captivated the merchants.
A total of more than 1,700 Dubai and Oman derivatives contracts in a price window managed by S&P Global Commodity Insights were traded this month. As a result, just six months into the current year, the count for 2023 already exceeds the full-year figures since 2015, according to Platts, as the pricing agency is better known.
The surge in activity is important to global oil markets because it has contributed to the relative strength of Dubai prices against other international benchmarks, helping to shape global crude flows as cargoes they move between regions. The aggressive activity has baffled traders and made it harder to gauge whether Middle East markets have tightened as OPEC+ members, including Saudi Arabia, pledged to cut supply to try to reactivate prices.
A total of 1,732 shares in Dubai and Oman have changed hands this month, more than triple the monthly average from January to May, according to data compiled by Bloomberg. Each tranche, which represents a transaction for 25,000 barrels, helps set the price for Middle Eastern markers such as Dubai, which are the base for most Persian Gulf crude exports.
If a trader accumulates 20 similar partial derivatives, these can be consolidated into a so-called convergence, which is a real physical load. So far in June, there have been a total of 73 crude oil cargoes from Abu Dhabi’s Oman and Upper Zakum, and even added cargoes from Al-Shaheen and Murban.
China’s Unipec was by far the biggest seller this month, followed by Vitol Group, while TotalEnergies SE emerged as the top buyer of these Middle East partials, along with PetroChina Co., they show data compiled by Bloomberg.
–With assistance from Yongchang Chin, Serene Cheong and Alfred Cang.
