After a lovely day of 20C, yesterday was cool, and today I woke up to snow on the balcony.
It is actually warmer in Nuuk, Greenland than Montreal right now. Hard to plan or even decide
what to wear!!
And then I checked in on Oil prices:
Had to ask Copilot to help me through this:
Price of Oil; Remind me; does Murban Oil need to transit through the Strait of Hormuz? And could you give me the highlights on the Price of Oil piece I have open... I find it confusing...
1. Does Murban crude need to transit the Strait of Hormuz?
Short answer: Not necessarily — Murban can bypass Hormuz if exported from Fujairah, but many Murban cargoes still move through Hormuz depending on the loading terminal.
What the evidence shows:
Murban can be exported without using Hormuz when loaded at Fujairah, which is outside the strait. UNCTAD explicitly notes that “only Oman crude and Murban crude loaded at Fujairah are used in the Dubai index” after Hormuz-related disruptions.
This implies Fujairah-loading Murban avoids the chokepoint.
However, Murban is also exported from Jebel Dhanna, which does require a Hormuz transit.
Multiple reports confirm tankers heading to Jebel Dhanna to load Murban crude by passing through the Strait of Hormuz — for example, the Suezmax Pola transited Hormuz specifically to load Murban at Jebel Dhanna.
So the real-world answer:
Murban can bypass Hormuz (via Fujairah), but not all Murban exports do. When loaded at Jebel Dhanna, it must transit the strait.
2. Highlights of the article you have open
(Source: your current tab — OilPrice.com)
Core takeaway
The Platts Dubai benchmark is breaking down because the Strait of Hormuz disruptions have choked off physical oil flows, leaving the benchmark disconnected from reality. As a result, Murban crude is becoming the de‑facto anchor for Middle East pricing, and price discovery is shifting toward Murban futures on IFAD.
Key points, clearly structured
A. Why the Dubai benchmark is failing
Hormuz disruptions halted many exports, so cargoes can’t be loaded, undermining the benchmark’s physical basis.
Platts cut deliverable grades from five to two (Murban + Oman) — a 40% reduction in supply.
Liquidity collapsed, and a few traders (notably TotalEnergies) dominated the Market-on-Close window, distorting prices.
B. Why Murban is taking over
Oman crude can bypass Hormuz but hasn’t filled the gap due to thin liquidity.
Murban remains abundant and tradable, so it increasingly sets the effective floor for Dubai pricing.
Asian refinery upgrades reduced the historical premium for light sweet crudes, making Murban more interchangeable with sour grades.
C. Structural shift in pricing
Price discovery is migrating from Platts’ narrow assessment window to continuous Murban futures trading on IFAD.
Platts tried to modernize the benchmark by allowing Murban to float freely with a quality adjustment, but the Iran war forced them to partially reverse the change to keep barrels flowing.
D. Big picture
The Middle East pricing system is in transition.
Murban is evolving from “one of the grades” to a central pillar of a more resilient, exchange-based pricing system.
At this point, I need to know who 'Platts' and 'IFAD' are, and what 'Dubai pricing' is!
✔️ What Platts is
S&P Global Platts is a major price-reporting agency.
They create and maintain many of the world’s oil benchmarks, including:
Platts Dubai (the benchmark discussed in your article)
Platts Dated Brent
Platts Market-on-Close (MOC) methodology
They don’t trade oil; they observe trades and publish benchmark prices used across the industry.
🏛️ What is IFAD?
IFAD = ICE Futures Abu Dhabi.
It’s a futures exchange launched in 2021 by ICE (Intercontinental Exchange — the same group that runs ICE Brent).
✔️ What IFAD does
Hosts Murban crude futures, the first UAE‑based physically deliverable futures contract.
Provides continuous, exchange-based price discovery, unlike Platts’ short “Market-on-Close” window.
Has become a fallback pricing venue now that the Platts Dubai benchmark is under stress.
(Your article explicitly says price discovery is shifting toward Murban futures on IFAD.)
Why IFAD matters right now
Because Hormuz disruptions have broken the physical Dubai benchmark, traders are relying more on Murban futures on IFAD to understand real market value.
🌏 What is “Dubai pricing”?
“Dubai pricing” refers to the Platts Dubai benchmark, one of the main reference prices for Middle Eastern crude sold to Asia.
✔️ What the Dubai benchmark is
A medium sour crude benchmark historically used to price ~18 million barrels/day of oil into Asia.
Based on physical cargo trades of a basket of grades:
Dubai
Oman
Upper Zakum
Al Shaheen
Murban
(Now reduced to just Murban + Oman due to Hormuz disruptions.)
✔️ How Dubai pricing works
Platts observes trades during a short daily window called the Market-on-Close (MOC).
They piece together “partials” (small cargo slices) into full cargoes to determine the benchmark price.
✔️ Why Dubai pricing is “cracking”
Your article highlights several reasons:
Hormuz disruptions mean many cargoes can’t load, so the benchmark loses physical basis.
Deliverable grades cut by 40%, leaving only Murban and Oman.
Thin liquidity lets a few players dominate (e.g., TotalEnergies buying 77 of 82 cargoes).
Price discovery is migrating to Murban futures on IFAD.
In short:
Dubai pricing = the traditional Middle East benchmark system, now under severe stress.
🧭 Quick recap in one sentence
Platts = the price-reporting agency running the Dubai benchmark.
IFAD = the futures exchange where Murban futures trade.
Dubai pricing = the Platts Dubai benchmark system for Middle East crude sold to Asia.
If you want, I can also map out how Murban, Oman, Platts Dubai, DME Oman, and IFAD Murban all interlock — a visual model really helps make sense of this system.
Please...
Absolutely, Louise — here’s the clean, structured, intuitive model you asked for, built directly from the article you have open .
This will give you a visual mental map of how the whole system fits together: Platts → Dubai pricing → Murban → IFAD.
🧩 The Middle East Oil Pricing System — Clear, Layered Model
1) Platts
What it is:
A price‑reporting agency (S&P Global Platts) that observes trades and publishes benchmark prices.
Role in your article:
Platts runs the Dubai benchmark, which is now “in a perilous position” because Hormuz disruptions have broken the physical basis of the benchmark .
Think of Platts as:
The referee who watches trades and declares the official price.
2) Dubai Pricing (Platts Dubai Benchmark)
This is the traditional Middle East benchmark used to price crude sold to Asia.
How it works
Platts watches trades during a short window called the Market-on-Close (MOC).
They combine small “partials” into full cargoes.
The price that emerges becomes the Dubai benchmark.
What’s in the Dubai basket
Historically:
Dubai
Oman
Upper Zakum
Al Shaheen
Murban
But due to Hormuz disruptions, Platts cut deliverable grades from five to two — Murban and Oman (a 40% reduction) .
Why Dubai pricing is failing
Tankers can’t load because Hormuz is unsafe.
Liquidity collapsed.
A few players (e.g., TotalEnergies) dominated the window, buying 77 of 82 cargoes in March .
The benchmark is now “effectively broken.”
Think of Dubai pricing as:
A fragile, old-school system that depends on physical cargoes moving through Hormuz — and right now, they aren’t.
3) Murban
A light sweet crude from Abu Dhabi.
Why Murban matters now
It’s one of the few grades still flowing.
Oman can bypass Hormuz, but liquidity is thin.
Murban is abundant and tradable.
It increasingly sets the effective floor for Dubai pricing.
Platts had to redesign the benchmark around Murban in January, then partially reverse the change in March due to the Iran war .
Key insight
Murban is no longer “just another grade.”
It’s becoming the anchor of Middle East pricing.
Think of Murban as:
The workhorse crude holding the system together while everything else is disrupted.
4) IFAD (ICE Futures Abu Dhabi)
IFAD = ICE Futures Abu Dhabi, a futures exchange launched in 2021.
What IFAD does
Hosts Murban futures — a physically deliverable contract.
Provides continuous price discovery, unlike Platts’ narrow window.
Is becoming the fallback pricing venue as Dubai pricing breaks down.
Why IFAD is rising
Your article says price discovery is “beginning to migrate” to Murban futures on IFAD because they remain functional even when physical-linked benchmarks fail .
Think of IFAD as:
The modern, resilient exchange that keeps working even when the physical market is disrupted.
🧠 Putting it all together — the simple picture
Old system (breaking):
Platts → Dubai benchmark → physical cargoes → Hormuz chokepoint → thin liquidity → distortion
New system (emerging):
Murban → IFAD futures → continuous pricing → bypasses physical bottlenecks
The transition
The Middle East is shifting from a physical, window-based benchmark (Dubai)
→ to a futures-based, exchange-driven benchmark (Murban on IFAD).
This is exactly the structural shift your article is describing.
If you want, I can also build you:
A diagram showing the flows between Platts, Dubai, Murban, Oman, and IFAD
A timeline of how the Dubai benchmark broke
A side-by-side comparison of Dubai vs. Murban pricing
A plain-language explainer of “partials,” “MOC,” and “quality adjustments”
Just tell me what would help you most.
West Texas crude is not rising as much as Brent. Should we expect increases in North American gasoline prices?
Short answer:
Yes — North American gasoline prices are still expected to rise, even though WTI (West Texas Intermediate) is increasing less than Brent. The reason is that gasoline prices follow global crude dynamics, and Brent is the benchmark most exposed to the geopolitical shock driving prices higher.
Below is the clear, sourced breakdown.
🛢️ Why Brent is rising more than WTI
The Brent–WTI spread has widened sharply because Brent is more exposed to global disruptions, especially the Strait of Hormuz situation.
Brent rose more because it is waterborne and directly affected by global shipping disruptions and geopolitical risk.
WTI rose less because the U.S. has above‑average inventories and released oil from the Strategic Petroleum Reserve, softening price increases.
A 60‑day Jones Act waiver also eased U.S. domestic shipping constraints, further limiting WTI’s rise.
⛽ Will North American gasoline prices rise?
Yes.
Even with WTI lagging Brent, the U.S. Energy Information Administration (EIA) explicitly forecasts higher gasoline prices:
“Higher crude oil prices are leading to higher prices at the pump for gasoline and diesel.”
U.S. average retail gasoline is forecast to rise to ~$4.30/gal in April.
Crude oil typically makes up about half of the retail gasoline price.
Seasonal factors (spring/summer driving season) also push gasoline prices upward.
Why gasoline rises even if WTI lags
Gasoline is a globally priced product.
Even North American refineries are influenced by Brent because refined products move internationally.
Brent sets the marginal price for many refined products.
When Brent spikes, wholesale gasoline prices rise — even if WTI is relatively soft.
Refinery margins tighten when crude rises.
This pushes pump prices up regardless of which benchmark moves more.
Canada imports refined products.
Québec and Atlantic Canada rely partly on imported gasoline/diesel, which is priced off Brent-linked markets.
📈 Current price context
Here are the live benchmark levels from your search:
This widening spread is exactly what the EIA described in its forecast.
🧭 Bottom line for North America (including Québec)
Even though WTI is not rising as fast as Brent:
Gasoline prices will still rise, driven by global crude dynamics and seasonal demand.
The EIA forecasts a notable increase in pump prices.
Canada, especially Eastern Canada, is more Brent‑exposed than the U.S. Midwest, so the Brent spike matters more for you.
If you want, I can also give you:
A simple diagram showing how Brent vs. WTI affects gasoline prices
A Québec‑specific outlook based on regional supply chains
A short-term forecast for diesel vs. gasoline (diesel is rising even faster)
Just tell me what angle you want next.
What is West Texas 'intermediate'?
West Texas Intermediate (WTI) is a grade of crude oil and one of the world’s major oil price benchmarks. It is called “intermediate” because of its medium density—not as light as the very lightest crudes, but still firmly in the “light” category. Here’s the clear, sourced breakdown.
🛢️ What West Texas Intermediate is
WTI is a light, sweet crude oil used as a benchmark for oil pricing.
It is “light” because it has low density (API gravity around 39.6°).
It is “sweet” because it has very low sulfur content (≈0.24%).
It is primarily produced in the United States (Texas, Louisiana, North Dakota).
It is the underlying crude for the NYMEX WTI futures contract, delivered at Cushing, Oklahoma, a major pipeline and storage hub.
🧭 Why it’s called “intermediate”
The name reflects its intermediate density relative to other crude oils.
It is lighter than many global grades (like Dubai or Oman) but not the absolute lightest possible crude.
This classification is tied to its API gravity, which determines how easily it flows and how efficiently it can be refined.
🌍 What WTI is used for
WTI is the main benchmark for U.S. oil prices.
When analysts or news outlets talk about “the price of oil” in a North American context, they often mean WTI.
It is widely traded on futures markets and closely watched because its price reflects:
U.S. supply and inventory levels
Domestic production trends
Refinery demand
Broader global market sentiment
🧪 Why WTI matters
Because WTI is very high quality, it yields a high proportion of valuable refined products like gasoline and diesel.
This makes it especially important for North American fuel markets.
If you want, I can also explain how WTI differs from Brent, or how WTI influences gasoline prices in Québec (which is more Brent‑linked).
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