Abu Dhabi National Oil Co., the UAE's state oil company, said it will change how it prices its crude grades, months after wild swings in the benchmark it had been using to underpin its sales. This run falls into the price and market structure bucket, a shift in how one of the Gulf's largest producers sells its barrels.
From November 1, all Adnoc onshore and offshore crudes will price against a regional Dubai benchmark published by Platts, rather than the ICE Futures Abu Dhabi Murban contract that started in 2021. Prices will now be announced in the month before loading, rather than two months ahead. The company said the change reinforces its commitment to pricing transparency for a growing customer and investor base.
Middle Eastern oil pricing became a pinch point during the Iran war, when intermittent disruption to crude flows through the Strait of Hormuz drove heavy volatility and some traders amassed large positions in regional benchmarks. At one point in March, the Murban contract traded north of $160 a barrel as regional supplies were hit, while Brent futures peaked this year at $126 and physical Dated Brent topped $140.
The switch brings the UAE more in line with other Gulf producers such as Saudi Arabia, and it matters most for the Asian refiners who dominate buying of the country's barrels. It also draws the curtain on Abu Dhabi's push to establish Murban as a regional trading benchmark barely five years after it began trading. ICE said it would suspend Murban futures with no open interest immediately and wind down the rest at expiry.
Since the war began, Adnoc has sold about 110 million barrels in tenders as it shuttled supplies out of Hormuz, alongside its longer running term agreements. Ahmed Mehdi, managing director of Renaissance Energy Advisors, said the contract suffered during the Hormuz crisis and the move helps rebuild trust with customers, while highlighting the difficulty of being producer, trader and benchmark provider at once.