Shell has urged oil pricing agency S&P Global Platts to consider including other regional grades, such as Russian Urals, to set the key crude benchmark dated Brent, its vice president for crude trading and supply said on Wednesday.
The benchmark, based on light North Sea crude grades, is used to price about two-thirds of the world’s oil but a decline in North Sea output has led to concerns that physical volumes could become too thin and prone to large price swings.
Platts announced that it would add a fifth grade, Troll, to the benchmark slate from January 2018 but Shell says more must be added in the next two to three years and considers Russian medium sour Urals as a top candidate.
“A good benchmark need not only to be representative of what the region produces…If you had to pick one grade of crude, Urals is the one which North West European refineries should be designed to run optimally,” Mike Muller, the vice president of crude trading and supply at Shell, told the Platts Crude Summit in London.
