First independent Chinese refiner trades DME Oman

05/05/2016 08:05 AST

Shandong Chambroad Petrochemicals Co, has become the first independent Chinese refiner to trade Oman crude oil futures on the DME, the leading east of Suez energy exchange. The Chinese government allowed independent refiners to import crude oil for the first time earlier this year. So far 10 independent refiners have been granted approval by the Chinese authorities, with more expected to follow.

Shandong Chambroad is expanding its international operations significantly and expects to become a regular trader of the DME Oman contract. The refiner will use DME Oman crude oil futures for risk management and physical procurement.

DME will hold a roundtable for independent refiners in Shandong, China in mid-May to assist other local participants with the Exchange’s registration process.

“We are delighted to welcome Shandong Chambroad to the DME,” DME Managing Director Owain Johnson said. “The independent Chinese refinery sector is the most exciting demand opportunity in the global oil markets right now and we are delighted to see these players select DME for their risk management needs.”

Straits Financial LLC was the DME Clearing Member that facilitated the trading activity. “We are delighted to have enabled Shandong Chambroad to access the DME Oman Crude Oil Futures contract,” Straits’ Executive Vice-President Roger Quek said. “Straits Financial is excited about the potential of the independent Chinese refining sector and we are looking forward to enabling other refiners to access the international energy markets.”

DME’s flagship Oman Crude Oil Futures Contract (DME Oman) contract has been billed as the most credible crude oil benchmark relevant to the rapidly growing East of Suez market. Reflecting the economics of the Asian region like no other contract, and the largest physically delivered crude oil futures contract in the world, DME Oman is the world’s third crude oil benchmark and the sole benchmark for Oman and Dubai exported crude oil.

DME is a joint venture between Dubai Holding, Oman Investment Fund and CME Group. Global financial institutions and energy trading firms including Goldman Sachs, JPMorgan, Morgan Stanley, Shell, Vitol and Concord Energy also hold equity stakes in the DME.

Oman Daily Observer