Dubai Crude

Dubai is medium sour crude, roughly 31 degrees API with about 2% sulphur, and it is the reference price for Middle East barrels heading to Asia, the largest single crude trade flow on earth. There is no Dubai futures contract of consequence; the benchmark is a Platts assessment built in the Singapore Market on Close window through a partials mechanism, in which traders deal 25,000-barrel partial cargoes that converge into a full 500,000-barrel physical cargo once a buyer accumulates twenty partials from one seller. Because the original Dubai stream is small, Platts allows sellers to deliver alternative grades: Oman, Upper Zakum, Al Shaheen, and Murban, the last with a quality adjustment, which keeps the assessment anchored to real, deliverable Gulf supply.

Dubai's importance is out of proportion to its traded volume because of official selling prices. Saudi Aramco, Kuwait, Iraq, and Iran historically set their Asian term prices as differentials to Dubai-linked averages, so tens of millions of barrels per day of term crude reference it. The Brent-Dubai exchange of futures for swaps, the EFS, quotes the spread between the light sweet Atlantic world and the sour Asian world; when the EFS narrows, Atlantic crude becomes competitive in Asia and arbitrage barrels flow east.

The structure of the eastbound market shifted twice in the 2020s. ICE Futures Abu Dhabi launched Murban futures in March 2021, giving the region a physically delivered light sour exchange contract for the first time, and Saudi Aramco now uses a Platts Dubai and Oman futures-linked average in its Asian OSP formula. Then, after the February 2022 invasion of Ukraine, discounted Russian Urals rerouted from Europe to India and China, competing head-on with Gulf grades inside Dubai-priced territory.