S&P Global Platts is delaying plans to incorporate West Texas Intermediate crude from Midland, Texas, into its Dated Brent price assessment starting in July 2022 after the energy industry raised several concerns, particularly around freight costs.
The agency still plans to combine WTI with Dated Brent sometime in the future, with Platts Global Director for Oil and Liquefied Natural Gas Markets Vera Blei citing “strong support in the market.”
The proposed change was meant to reflect the growing importance of U.S. exports in global energy markets.
Dated Brent is a pivotal gauge used to price the majority of traded barrels of oil around the world.
Published daily by Platts, it reflects the price of physical crude oil in Europe’s North Sea. The benchmark has faced a major problem: For years, production of Brent and four other grades of crude in the North Sea has declined.
Platts received a broad spectrum of responses during its consultation on the proposed changes. Some traders welcomed the move as a necessary modification, while some had expressed concerns over the potential impact on derivatives, it said.
Platts said it will continue to organize a series of working groups in the coming months which will focus on standardizing the trading terms and conditions to reflect the inclusion of WTI Midland in the Brent complex.
“This will allow considerations of CIF terms and conditions, as well as any alternatives that will ensure continued connectivity between Dated Brent and Cash BFOE in light of the upcoming incorporation of Midland WTI into the complex,” it said.