Dubai Mercantile Looks to Swaps to Break Dubai Price’s Hold - BusinessWeek

The Dubai Mercantile Exchange, the United Arab Emirates oil futures market, plans to introduce Oman crude-based swaps contracts to woo Asian refiners away from Dubai-linked derivatives sold in the over-the-counter market.

The exchange will offer both swaps and options this year once regulators approve them, Chief Executive Officer Thomas Leaver said in an interview in Kuala Lumpur. The new derivatives will help refiners manage their price risk based on Oman’s output of 850,000 barrels a day rather than Dubai’s 80,000 barrels a day, he said.

“There hasn’t been an alternative Oman swaps contract, so if there is a swap linked to it that will allow people to do size trades and be additive in terms of their hedging,” Leaver said.