Asian refiners switch from Dubai to Brent to price US crude, sources say

By Florence Tan and Yuka Obayashi

SINGAPORE, March 27 (Reuters) - Asian refiners are beginning to switch to pricing U.S. crude oil purchases against global benchmark ICE Brent instead of Dubai after the Middle East marker spiked to record levels this month, three refining and trade sources said on Friday.

The move could reduce liquidity for the Middle East benchmark in the derivatives market as traders shift hedges to ICE Brent, one of them said.

Asian buyers have just begun booking U.S. crude cargoes for delivery in July this week, he said, adding that Japanese refiner Taiyo Oil bought 2 million barrels of U.S. light crude via a tender at about $19 a barrel above ICE Brent for July delivery. The Japanese refiner, which typically buys WTI crude pegged against Dubai prices, declined to comment.

Other Japanese refiners have also purchased U.S. crude priced against ICE Brent instead of Dubai, the same source said. Details of those deals were not immediately available as they were done through private negotiations, he said.

Dubai spiked to an all-time high of $169.75 last week surpassing Brent LCOc1, making Middle East supply the most expensive oil in the world, as the amount of crude available for trading fell after S&P Global Platts excluded three of the five crude grades in anticipation of a prolonged disruption to shipping via the Strait of Hormuz.

Robust demand from French major TotalEnergies TTEF.PA has supported Dubai prices.

Following the market volatility, some Asian refiners had requested that the world's top exporter Saudi Aramco 2222.SE change its benchmark to ICE Brent from Platts Dubai, traders said.

Saudi Aramco could not be immediately reached for comment outside office hours.