Japanese bank Mizuho plans to boost its support of oil trade after getting approval from the Dubai Mercantile Exchange (DME) to issue letters of credit directly from Singapore.
Mizuho is the first Japanese bank to be approved by the DME to guarantee deliveries of Oman Blend crude oil through the exchange.
“We have had an agreement with the Chicago Mercantile Exchange for the past three years, but this time with the Dubai Mercantile Exchange, it will allow us to support our customers doing Oman crude oil trade, which we have not done before,” Masahiro Goda, general manager of global trade finance division Asia Oceania department at the bank, tells GTR.
We are very keen to continue to support trade of natural resources including oil and minerals.
“The reason why we needed this footprint is because we support a lot of oil traders. We are very keen to continue to support trade of natural resources including oil and minerals, and this is a very important step for us,” he adds, pointing out that Oman crude has been gaining traction from Asian players.
According to Christopher Fix, CEO of the DME, the Asian market continues to drive oil demand and is therefore central to the exchange’s strategy.
“Delivering greater efficiencies for our clients and providing them with opportunities to reliably and conveniently participate in the market is an ongoing priority for DME, and enhancing the financing environment is at the core of our efforts in this direction,” he says.