Changes to the ‘Dated Brent’ benchmark: more to come

On 25 February this year Platts, a division of S&P Global, announced the inclusion of delivered, or CIF (Cost, Insurance and Freight), Rotterdam offers of North Sea oil cargoes into its flagship Dated Brent benchmark starting from 1 October 2019. Competing price reporting agency (PRA) Argus is already publishing its ‘New North Sea Dated’ assessment (this includes delivered assessments of non-North Sea grades) and is likely to officially adopt it as a methodology behind its ‘North Sea Dated’ index in July this year. These moves may represent the biggest changes to a major global oil benchmark this century. The changes are necessary for two main reasons: the fall in North Sea production and trade and the increase in Europe’s oil imports from the USA. This Comment will discuss the current state of the Dated Brent benchmark, the impact of declining volumes of oil included in the price assessment process, and the increasing flow of US oil exports to Europe.