Sinochem has delivered its first cargo of Middle East crude as the Chinese state-owned energy and chemicals giant looks to boost its oil trading business in Asia, Reuters reported on Tuesday, citing trade sources.
Sinochem delivered a cargo of Oman crude for October loading to commodity trading giant Trafigura during the S&P Global Platts Market on Close process on Monday, according to Reuters’ sources.
The Market on Close process, or window, is used by Platts to set the daily price of the Dubai benchmark, a Middle Eastern benchmark, off which nearly 15 million barrels per day (bpd) of crude from the Middle East are priced for exports to Asia.
Sinochem looks to diversify its trading capabilities with the Middle East trading window and expand its derivatives trading, according to several of the sources who spoke to Reuters.
Sinochem has been active in oil trading and services since the 1950s and these have mainly included the import, export, and re-export of crude oil and refined oil products.
Asian and Middle Eastern energy companies have been looking to diversify their trading capabilities and tools.
In March, Abu Dhabi’s national oil company ADNOC made its first trades via the S&P Global Platts pricing process for Dubai crude oil, in a rare move for a Middle Eastern producer.
It is unusual that a producer in the Middle East takes part in trades that underpin the price of the crude produced in its own region, according to trading sources who spoke to Reuters.
The Oman/Dubai average is used by Middle Eastern exporters to price their crude going to Asia. The price movements of the Dubai and Oman crude are key in the decision-making process of Saudi Aramco, the world’s single biggest crude oil exporter, when it sets the price of its oil going to Asia.
By Tsvetana Paraskova for Oilprice.com
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