MUSCAT: Physical deliveries of Omani crude via the exchange delivery mechanism of the Dubai Mercantile Exchange (DME) rose 18 per cent to 63.77 million barrels during the first quarter of this year, the UAE-based exchange announced on Thursday. This compares with physical deliveries of 54.01 million barrels handled during the same period last year.

DME, partly owned by Oman Investment Authority (OIA), is a leading international energy futures exchange that also lists the Oman Crude Oil Futures Contract (DME Oman) as its flagship physically settled contract – a key benchmark of Middle East crude pricing.

“We always look at the physical performance of the exchange as a true indicator of market dynamics in the East of Suez market. We have seen a strong boost in crude oil demand since the beginning of the year,” said Raid al Salami, Managing Director – DME in a statement. DME Oman’s daily pricing is utilized by Middle East national oil companies (NOCs) to price oil exports from the Middle East to Asia and acts as a fundamental indicator for crude oil supply/demand in Asia. Accordingly, NOCs from Oman, Saudi Arabia, Kuwait, Bahrain and Dubai all use DME Oman pricing as part of 5.5 million barrels of crude that is exported to Asia each day.

The buoyant figures for Q1 2023 build on an equally robust performance reported by the exchange during 2022. Physical deliveries handled through the DME soared 23 per cent year-on year to over 181 million barrels in 2022, up from 147 million barrels a year earlier.

Also in 2022, physical deliveries of Omani crude topped the 3 billion barrels mark – representing the total volume handled by the exchange via its physical and Exchange of Futures for Physical (EFP) mechanism.

According to the exchange, trading volumes on DME were also significantly higher as the global trading community embraced its price discovery mechanism as an essential risk management and hedging instrument during the period of high volatility seen in energy markets during 2022.