Brent Crude Oil: Genesis and Development of the World's Most Important Oil Benchmark

In 2023, the Brent oil benchmark underwent a significant change by incorporating West Texas Intermediate oil from Midland, produced in the US, and sold into European and Asian markets. This change has raised questions about its future development and survival. This book revisits the history and genesis of the Brent oil benchmark, discussing the role of the North Sea, the British government, the oil exchange, and the growing market ecosystem of price reporting agencies.

Format: Hardback
Length: 139 pages
Publication date: 30 April 2023
Publisher: Springer International Publishing AG

In 2023, a significant transformation occurred in the global oil market, with the introduction of a new benchmark called Brent oil. This benchmark, which serves as a key international price indicator for crude oil, underwent a substantial change by incorporating another key benchmark, West Texas Intermediate (WTI) oil, produced in the United States and sold into European and Asian markets. Brent oil is widely used to set prices for over 70% of global crude oil, making this fundamental shift in the composition of the benchmarks a subject of debate among observers. Looking back to the past can provide valuable insights for the future, particularly in this context.

This book delves into the history and origins of the Brent oil benchmark, exploring how it emerged as the dominant force in the global oil market. Written by individuals who played pivotal roles in trading and shaping the market, the book offers a rich and textured narrative that brings to life the events, companies, and individuals that shaped its history. It provides a comprehensive introduction to the international oil markets, shedding light on the transition from OPEC-set prices to oil benchmarks. The book also explores the role of the North Sea in the global oil landscape, highlighting the significance of the British government's involvement in the British national oil and gas monopoly (British National Oil Corporation or BNOC).

The development of North Sea oil, which coincided with liberalization policies in the United Kingdom and the United States, is examined in detail. The challenges faced by the oil exchange (International Petroleum Exchange) in London, the home of Brent, are explored, including failures, attempted takeovers, and the eventual sale of the exchange to the Intercontinental Exchange (ICE). The book also examines the growing market ecosystem of price reporting agencies (PRAs), which play a crucial role in establishing the value of the Brent benchmark.

In conclusion, this book provides a comprehensive and insightful exploration of the history and development of the Brent oil benchmark. By revisiting the past, we can gain valuable insights into the current state and future prospects of the global oil market. The lessons learned from the past can help us navigate the complex dynamics of the industry and make informed decisions about its future.

Weight: 336g
Dimension: 210 x 148 (mm)
ISBN-13: 9783031282317
Edition number: 1st ed. 2023