Intercontinental Exchange Inc. (ICE) has agreed with Chevron, Occidental, and Trafigura to use the soon-to-be-launched UAE-based Murban crude futures contract as a pricing benchmark for US oil sales to Asian markets. The move also underscores the importance of US oil exports. Despite only starting exporting crude four years ago, the US now exports over 3 million bpd of oil overseas, including to major oil importers such as China, Taiwan, and South Korea.
The new price benchmark will allow Asian crude buyers to use it as hedging against physical purchases of US oil. It also eliminates the need to use the London-based benchmark Brent crude future contract for hedging. It will also act as an alternative to the Dubai/Oman benchmark, which is currently the most commonly used Middle East standard.
