Riyadh – Decypha: Saudi Arabia has announced its plan to change the method it charges European countries for oil from the Brent Weighted Average (BWAVE) to the ICE settlement for the Brent benchmark, a source told The National.
While, both price references are part of the Brent benchmark which is used as a price base for most of the world’s crude; the move, which is expected to take effect July 1st, is part of the country’s efforts to increase the appeal of Saudi oil thought easing the purchase process, and allowing buyers to hedge better.
After years of following the Saudi pricing method, Kuwait shifted its pricing in late 2015 to further enhance its appeal to European markets.
Generally, Russian oil had dominated European markets, which have been neglected by major OPEC producers. However, as Russia moved aggressively into Asian markets more room opened up for OPEC members such as Saudi Arabia and Iraq.
The ICE Brent Crude futures contract is a deliverable contract based on EFP delivery with an option to cash settle.
By Decypha Editorial Team
