SINGAPORE, April 19: Oman’s endorsement of a new Middle East sour crude futures contract offers the best hope yet for an overhaul of Asia’s beleaguered oil benchmark, although the true measure of its success lies not in Dubai but Riyadh.

Saudi Arabia, the world’s biggest exporter, now prices its 5 million barrels per day (bpd) of Asian exports off the average assessed physical quotes of Dubai and Oman crude, in contrast to its European and US sales, both based on futures contracts.

But the kingdom has been exploring alternatives to its current Eastern pricing system, one of which would be a robust Oman-based futures contract, trading sources say.

The key is the Saudis. If they support Dubai and Oman, which they well could do to get the first successful futures oil market in the Middle East, the exchange will succeed by definition, said a Singapore-based trader.

It is expected to launch in the fourth quarter after consultations with the industry on details of the contract.—Reuters