Oil: Refining, Storage and Asian Price Benchmarks: practical consequences

Contracts priced on Singapore assessments

For lawyers and advisers, the oil hub creates a recognisable set of questions. Contracts for the sale of oil products in Asia almost always refer to Platts assessments, and the precise wording of the pricing clause determines who bears the risk of price movements during the pricing period. Disputes arise when an assessment is discontinued or changed, when a bill of lading date is contested or when a market disruption makes the reference unrepresentative. A well-drafted contract therefore provides for a fallback reference, for the treatment of methodology changes and for the determination of the pricing period.

Physical and paper positions also need to be aligned. A trader who buys a cargo priced on MOPS and hedges it with swaps settled on the same assessment is protected only if the pricing periods match. Differences between the physical pricing dates and the swap averaging period create a residual exposure, often called basis risk, that can be large in volatile markets such as those of March 2026. Credit, storage and inspection arrangements must fit together, since a lender who finances a cargo or a tank of stock relies on documents produced by several independent parties. The collapses of 2020, which Chapter II of Part H examines, have made banks far more demanding in this respect.

Checklist for advisers

Identify the Platts assessment, the averaging period and the pricing trigger in each sale contract, and provide for a fallback if the assessment is changed or suspended.
Align the averaging periods of physical contracts and hedging swaps, and quantify the basis risk that remains.
Check whether dealing in oil swaps with third parties requires a capital markets services licence under the Securities and Futures Act or falls within an exemption, and whether reporting obligations apply.
Ensure that traders understand that misleading bids or trades in the Platts window may amount to market misconduct when they affect cleared or over-the-counter derivatives.
In storage and blending contracts, define specifications, sampling, the inspection company and the final certificate, and allocate liability for off-specification or contaminated product.
When financing stocks, verify tank receipts directly with the terminal operator, require independent inspection and monitor inventory regularly.
For refinery and chemical investments, model the carbon tax at the published rates to 2030, the effect of transitory allowances and the cost of decarbonisation projects.
Check sanctions and export control exposure for crude and products of uncertain origin, as set out in Chapter IV of Part H.

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

All Singapore law advice is provided through KGP Legal LLC, an established and duly licensed firm of Singapore advocates and solicitors.

KGP Legal LLC is a medium-sized law firm in Singapore that is capable of providing the full range of legal services and corporate administration work. Please contact me directly at [email protected] if you need any further information.

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SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

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