Oil pricing firm S&P Global Platts should consider adding other regional grades to dated Brent crude to protect the benchmark, a Shell executive said today.
Speaking at the Platts Crude Summit, Mike Muller, Shell's vice president of crude trading and supply, said the agency should add crude from outside the North Sea, like Russian Urals, to safeguard Brent, which prices most of the world's oil, from falling North Sea supply.
"A good benchmark need not only be representative of what the region produces...If you had to pick one grade of crude, Urals is the one which North West European refineries should be designed to run optimally."
According to Reuters, Shell two years ago said adding Urals would not be "worth the trouble".
Platts revamped its Brent oil assessment for the first time in a decade earlier this year to address this very issue. Norway's Troll was added to the four British and Norwegian crudes used to assess dated Brent, known as BFOE - Brent, Forties, Oseberg and Ekofisk.
The decision came as supply from the North Sea is seen falling in the near future, leading to concerns that physical volumes could become too thin and thus vulnerable to manipulation.
In January, Shell agreed to sell a package of North Sea assets to UK firm Chrysaor, which will cut the oil major's production in the region by more than half, to about 110,000 barrels per day.