Derivatives that manage commodity risk over multiple periods are not Sharīʿah-compliant. This study proposes a Sharīʿah-compliant swaption model (waʿd or promise on swap) for hedging commodity risk. The model combines two separate and independent waʿds (promises) on commodity swap through...

The contemporary refining sector has to contend with many types of risks, among which price risk is considered to be the foremost. Moreover, refineries define it as a commodity risk and identify it with both opportunities and threats carried by changes in prices of crude oil and products of...