Middle East Oil Faces Pricing Confusion as Hormuz Traffic Halted

Article content(Bloomberg) — The halt to energy shipments through the Strait of Hormuz is disrupting how some of the world’s major oil grades are priced.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentS&P Global Energy has stopped accepting bids and offers for crude varieties that need to transit the vital chokepoint in its trading window that helps set the price for the Dubai regional benchmark, it said in a note to subscribers on Monday. The grades include Dubai, Upper Zakum, Al-Shaheen and some Murban cargoes, it said.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentThe pause comes as the crisis in the Middle East widens and vessels stop crossing Hormuz, leaving crude and fuel markets at risk of dislocation. In such cases, allowing bids and offers on the so-called Platts market-on-close platform may create wild swings that don’t reflect fundamentals, according to traders, who asked not to be named as they’re not authorized to speak publicly.Article contentArticle contentPlatts, as the S&P Global Inc. unit is better known, sets the Dubai oil price, against which most Middle Eastern crudes are pegged. Dubai prices are set daily, taking reference from bids, offers and trades in Asia during a half-hour trading window. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe move is an admission that, in this unprecedented situation, the physical “Arab-Gulf market has become unhinged and rudderless,” said John Driscoll, chief strategist at JTD Energy Services Pte. in Singapore. “Platts has faced challenges to their methodology before, such as whenever sanctions get imposed, but now we’re arguably in a more dire predicament.”Article contentS&P Global Energy will also stop publishing bids and offers for Middle East refined oil products that load from inside Hormuz in the same market-on-close trading window, it said in a separate note on Monday. Platts also said that it won’t accept nominations for liquefied natural gas shipments loading from Qatar’s export plant or the United Arab Emirates’ Das Island facility.Article contentLoadings of Murban, Abu Dhabi’s flagship grade, from Jebel Dhanna are affected. However, the variety can also be loaded from Fujairah, which sits outside Hormuz, so bids and offers are still being accepted for these cargoes.Article contentAsian refiners are dependent on the Middle East for the bulk of their oil. If problems with the pricing mechanism persist, purchases from major markets like China, India and Japan could be disrupted.Article content—With assistance from Nicholas Lua.Article content(Updates to add Platts’ comment on LNG nominations in the sixth paragraph.)Article contentTrending The (high) opportunity cost of paying off your mortgage early Mortgages Trump Urges Iran Leadership Change as Report Points to Talks PMN Business What's at stake for oil markets as Trump strikes Iran Oil & Gas Gulf Airlines Extend Flight Cancellations as Iran Targets Hubs PMN Business Feds to invest millions in startup accelerator to boost Canadian defence and dual-use companies Innovation Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. The (high) opportunity cost of paying off your mortgage early Mortgages Trump Urges Iran Leadership Change as Report Points to Talks PMN Business What's at stake for oil markets as Trump strikes Iran Oil & Gas Gulf Airlines Extend Flight Cancellations as Iran Targets Hubs PMN Business Feds to invest millions in startup accelerator to boost Canadian defence and dual-use companies Innovation