ABSTRACT
As a consequence, the Asian Petroleum Price Index (APPI) swaps market just faded away slowly towards the end of the mid-1990s. Nonetheless, APPI Minas and Tapis remained important benchmarks for physical crude oil trading as late as the late 2000s when they started to disconnect from other crude oil markers. Clearly, though, the nature of the APPI methodology – only published twice a week, assessments based on a panel system – made life incredibly difficult for traders and buyers of Malaysian and Indonesian crude oil, who were exposed to a potentially volatile benchmark that was thinly traded in the Asia time zone and considered to be unhedgeable. Australia and Papua New Guinea shifted away from using APPI in favour of Platts Dated Brent assessment in 2009. Indonesia kept faith with APPI a little longer, continuing to use it in its LNG formula until finally dropping it in February 2012.
