Oman Crude Achieves Strong 2023 Growth in Trading at Dubai Mercantile Exchange

The Dubai Mercantile Exchange (DME), the premier international energy futures exchange in the Middle East, announced on Thursday that it recorded impressive growth in total trading volume and physical delivery of Oman crude in 2023 compared to the previous year. This development solidifies Oman crude’s position as the main crude oil benchmark in the East of Suez market.

DME is home to the DME Oman Crude Oil Futures Contract (known as DME Oman or Oman crude), which generates the world’s largest amount of physically delivered crude oil. The DME Oman contract serves as the third-most important crude oil benchmark globally, used by five national oil companies based in the GCC countries.

DME’s front-month trading volume in 2023 surged to 800mn barrels, surpassing the 2022 figure of 752mn barrels and reaching the highest levels since 2018, according to a DME statement.

Similarly, the physical delivery volume for 2023 rose to 210mn barrels from the 2022 count of 181mn barrels, achieving another high since 2018. Furthermore, DME’s total physical exposure in 2023 rose to 262mn barrels from 214mn in 2022.

The remarkable performance during 2023 has strengthened DME’s standing on the global level, with its flagship Oman Crude Oil Futures Contract now representing 36% of the Middle Eastern crude heading to the Asian market – a phenomenal growth from just an 8% share in 2007.

Commenting on the exceptional growth in DME Oman’s trading volumes, Raid al-Salami, Managing Director of Dubai Mercantile Exchange, said, “In 2023, we experienced a dynamic period marked by notable achievements in business performance and strategic collaborations. These successes have significantly strengthened our market share and overall value.”

“As we enter the new year, we remain confident in sustaining our positive momentum despite ongoing changes across regional and global energy landscapes. We will continue to set new benchmarks of excellence and deliver value to our stakeholders,” he added.

DME’s accomplishments in 2023 included key milestones such as delivering 3bn barrels through the exchange mechanism since its inception and trading over 20bn barrels in total.

The exchange has recently entered a strategic partnership with the Saudi Tadawul Group (STG) in January 2024, enhancing its expertise and growth potential and opening promising opportunities. STG, a leading diversified capital markets group in the MENA region, entered into a binding agreement with existing shareholders of DME Holdings Limited to acquire a 32.6% stake in the Dubai Mercantile Exchange.

As a result of this agreement, STG has become the joint largest shareholder in DME Holdings alongside CME Group, with other shareholders including the Oman Investment Authority (OIA) and Dubai Holding, as well as global financial and commercial industry leaders.

Under the terms of the agreement, ensuring the integrity of the DME Oman contract has been of particular importance to all parties. It was agreed that no changes to any aspects of the DME Oman contract will result from the transaction contemplated by the agreement with STG. In addition, to avoid conflicts of interest and safeguard the twin imperatives of neutrality and price discovery, no Saudi Arabian crude oil contract will be traded, sold, or bought on, or indexed to, nor will Saudi crude be delivered against the DME Oman contract via DME.