The Saudi national oil company Aramco has decided to drop the West Texas Intermediate oil contract as the benchmark for pricing its oil beginning January 1, 2010.
Instead, it will start pricing its oil against a benchmark known as Argus Sour Crude Index, developed by a British company which is headquartered in London. The new benchmark will be used in pricing Saudi oil exported to the U.S.
Aramco has concluded that the oil it exports to the U.S. is of higher sulfur component and it should be priced in a more transparent manner.
Observers consider the Saudi move as an indication that it might decide to unpeg its currency from the U.S. dollar, and going with a British price index could be a step in that direction.
Source: www.menafn.com/arabic/qn_print.asp?StoryID=1093282156&sub1=true , November 11, 2009
