DME and new Shanghai exchange to partner on Asian futures contract



The Dubai Mercantile Exchange and the fledgling Shanghai International Energy Exchange on Monday announced a deal to cooperate on a much-needed new Asian benchmark crude oil futures contract.

But Chinese authorities have not yet approved the Shanghai crude futures contract because of concerns about loosening restrictions on physical crude oil importation.

The Shanghai International Energy Exchange, known as INE, was set up a year ago with the aim of establishing an energy derivatives trading platform that would give China more control over pricing the oil it is buying in increasing volumes, mainly from Middle East producers. Currently, it is at the mercy of London and New York, where the bulk of the world’s oil futures trading takes place.

The DME has been a booster of INE’s plans from the beginning as its Oman crude futures contract – which is a benchmark for Middle East producers – would dovetail nicely with the Shanghai contract, which INE hopes will be a benchmark for Chinese oil consumers.

INE officials have spent the past year meeting a wide range of potential partners and customers, including the chief executive of Abu Dhabi Holding Group, to work out details of the contract, including the underlying crude oil that would be delivered against it.

The INE chief executive Chu Juehai said on Monday that work is now complete and the exchange is ready, but the ball is in the government’s court. “As an exchange we are fully prepared but we are waiting for approval from the authorities,” Mr Chu said. “It won’t be too long but as yet the launch date is not determined. The government has the whole [approval] process in its hands.”

Mr Chu did not elaborate on what was causing the hold-up. But an oil trader for one of the state-owned oil Chinese oil companies who attended a briefing earlier in the day said the authorities are concerned about the physical delivery terms of the contract because they want to keep tight control on who is allowed to import crude in China.

Currently, only five state-owned oil companies, including CNPC and Sinopec, are allowed to import oil, as well as about 20 private Chinese companies. But for a contract to be effective and attract the trading volume it would need, INE needs big international oil companies, such as BP and Shell, as well as traders, such as Vitol and Mucuria, involved. Although most futures do not end up with physical delivery, a mechanism for those without import licences to take delivery will be needed.

There are also taxation and foreign exchange details that need to be worked out in terms of how the yuan-denominated Shanghai oil future will be settled.

Despite the delays, officials are gung-ho about the boost a Shanghai oil futures would give to the region’s oil market.

“The birth of the DME was to serve this very day,” said Ahmad Sharaf, the DME chairman. He said linking the producers and consumers of crude in the region would allow them to hedge the crude that they actually buy – that is, medium, sour grades, such as UAE’s Upper Zakum and Dubai – for a longer period of time.

DME’s chief executive, Chris Fix, said the current period of uncertainty for the oil market underlined the need for a better regional hedging system.

The weak regional crude market was illustrated this week when the state oil company Adnoc sold two dozen cargoes of Upper Zakum crude – about 12.5 million barrels – to buyers including Shell and Total, without insisting on determining the final destination, an unprecedented move by Adnoc which normally insists on tight control of crude marketing.

The tie-up between DME and Shanghai’s crude contract will certainly boost volume on the DME, Mr Fix said. “This will serve the actual Middle East–China trade flow and anything that does that will get the support of the oil producers and consumers.”

amcauley@thenational.ae

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Results:

First Test: New Zealand 30 British & Irish Lions 15

Second Test: New Zealand 21 British & Irish Lions 24

Third Test: New Zealand 15 British & Irish Lions 15

MATCH INFO

Fixture: Ukraine v Portugal, Monday, 10.45pm (UAE)

TV: BeIN Sports

Tree of Hell

Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla

Director: Raed Zeno

Rating: 4/5

Continental champions

Best Asian Player: Massaki Todokoro (Japan)

Best European Player: Adam Wardzinski (Poland)

Best North & Central American Player: DJ Jackson (United States)

Best African Player: Walter Dos Santos (Angola)

Best Oceanian Player: Lee Ting (Australia)

Best South American Player: Gabriel De Sousa (Brazil)

Best Asian Federation: Saudi Jiu-Jitsu Federation

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The specs: 2018 Harley-Davidson Fat Boy

Price, base / as tested Dh97,600
Engine 1,745cc Milwaukee-Eight v-twin engine
Transmission Six-speed gearbox
Power 78hp @ 5,250rpm
Torque 145Nm @ 3,000rpm
Fuel economy, combined 5.0L / 100km (estimate)

The specs

Engine: 1.5-litre turbo

Power: 181hp

Torque: 230Nm

Transmission: 6-speed automatic

Starting price: Dh79,000

On sale: Now

Call of Duty: Black Ops 6

Developer: Treyarch, Raven Software
Publisher:  Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5

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The Vines - In Miracle Land
Two stars

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Joker: Folie a Deux

Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson

Director: Todd Phillips 

Rating: 2/5

COMPANY PROFILE

Company: Bidzi

● Started: 2024

● Founders: Akshay Dosaj and Asif Rashid

● Based: Dubai, UAE

● Industry: M&A

● Funding size: Bootstrapped

● No of employees: Nine

Results

Ashraf Ghani 50.64 per cent

Abdullah Abdullah 39.52 per cent

Gulbuddin Hekmatyar 3.85 per cent

Rahmatullah Nabil 1.8 per cent

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The Cairo Statement

 1: Commit to countering all types of terrorism and extremism in all their manifestations

2: Denounce violence and the rhetoric of hatred

3: Adhere to the full compliance with the Riyadh accord of 2014 and the subsequent meeting and executive procedures approved in 2014 by the GCC  

4: Comply with all recommendations of the Summit between the US and Muslim countries held in May 2017 in Saudi Arabia.

5: Refrain from interfering in the internal affairs of countries and of supporting rogue entities.

6: Carry out the responsibility of all the countries with the international community to counter all manifestations of extremism and terrorism that threaten international peace and security

COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
Jigra
Director: Vasan Bala
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Rated: 3.5/5
The%20specs
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THE BIO: Martin Van Almsick

Hometown: Cologne, Germany

Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)

Favourite dessert: Umm Ali with dark camel milk chocolate flakes

Favourite hobby: Football

Breakfast routine: a tall glass of camel milk

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

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Moon Music

Artist: Coldplay

Label: Parlophone/Atlantic

Number of tracks: 10

Rating: 3/5

The specs

Engine: 1.5-litre 4-cylinder petrol

Power: 154bhp

Torque: 250Nm

Transmission: 7-speed automatic with 8-speed sports option 

Price: From Dh79,600

On sale: Now

Profile

Company name: Jaib

Started: January 2018

Co-founders: Fouad Jeryes and Sinan Taifour

Based: Jordan

Sector: FinTech

Total transactions: over $800,000 since January, 2018

Investors in Jaib's mother company Alpha Apps: Aramex and 500 Startups

COMPANY%20PROFILE
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The%20specs
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