One year on, Saudi Arabia's switch to pricing European crude sales against Brent futures has met with a mix of ambivalence and dismay as refiners struggle to plan profits against an unforeseeable, unfamiliar benchmark. Although few customers say the new system is a failure, most admit to some frustration as wild swings in the pricing mechanism and futures market move refiners between stellar profits and crushing losses on a monthly basis.

"The experiment has been a total flop," said one dissatisfied customer. "At times it is good for the buyer and at times it is good for the seller, but it is definitely not fair." It is a complaint heard from many customers, as oil marketer Saudi Aramco is forced to dramatically adjust its differential to Brent front-month futures in order to keep it competitive with other regional crudes - most priced off of Dated Brent.

But even with the frustration many attach to the new formula, none of the customers approached by Reuters were ready to advocate a return to the old system of pricing on media assessments of Dated Brent. Last April, Saudi Arabia stopped pricing its exports against Dated Brent - the benchmark for some 20 million barrels per day of Atlantic Basin crude - and switched to the weighted monthly average of the International Petroleum Exchange's Brent frontline futures contract (BWAVE).

It was the biggest pricing policy change in 10 years, introduced by the top global producer in an effort to escape the previous benchmark's ceaseless manipulation for its 1.6 million bpd of crude sold into Europe and South Africa. A year on, most customers have taken the change in stride but some say it has failed to yield many of the promised benefits, as both supplier and refiner continue to refer back to Dated Brent as a touchstone.

"It's a choice of two things, neither of which can be perfect," said Paul Horsnell of the Oxford Institute for Energy Studies. "Nobody ever thought it was going to be the final answer to the great mystery of how to price oil correctly." The ideal system of an undistorted Dated Brent marker allowing Saudi crude to be priced against prompt physical market values remained unobtainable, Horsnell added.

The BWAVE pricing forces Saudi Aramco to rationalise a benchmark much further down the time curve with a prompt sour crude market, resulting in wild swings in the differential of over $2 in one month. Under the previous Dated Brent system differentials rarely changed more than 20 cents one month to the next. "They've brought the volatility of Dated Brent into the OSP, but it's something you'll have to live with one way or another," said one large customer.

In turn, refiners have seen their profits gyrate wildly, with plants making million of dollars in profits or losses one month to the next and making planning all but impossible. Those dissatisfied with the new pricing regime have few options, but one possibility suggested is that Saudi Aramco begin compensating lifters directly once the BWAVE basis number is announced instead of trying to adjust later months' OSPs.

"We understand it's very difficult to make a forecast on the difference between BWAVE and Dated one or two months in advance," said one medium-size customer. "I think they need a mechanism to compensate lifters at the end of the month." Traders agree that the scales were evened at the end of last year, but say awaiting a possible pay-off down the road is not a good way of keeping customers satisfied. And some believe the year-end balance was pure luck.

"It's only a matter of coincidence," said a customer. "It's frustrating because they had a good idea and thought they had the technicians to manage it, but they're no magicians." In order to avoid these fluctuations, several customers have taken to hedging the BWAVE barrels back to Dated Brent, a tool known as the "Saudi swap".

Although it allows the monthly bumps to be smoothed, it eliminates the advantage of futures-related pricing by tying the refiner back to Dated Brent. "At the end of the piece, the refiners are still calculating their profits Dated-related, they haven't broken the fixation," said one industry source. "That's the fundamental problem."