Adnoc’s Murban crude futures starts trading

MEED    30 March 2021 (Last Updated March 30th, 2021 09:10)

Abu Dhabi National Oil Company (Adnoc) and Intercontinental Exchange (ICE) have announced the start of trading of the UAE’s flagship crude oil, Murban, as a Futures contract on the new ICE Futures Abu Dhabi (IFAD) commodities exchange. 

Abu Dhabi National Oil Company (Adnoc) and Intercontinental Exchange (ICE) have announced the start of trading of the UAE’s flagship crude oil, Murban, as a Futures contract on the new ICE Futures Abu Dhabi (IFAD) commodities exchange.

The launch event at Abu Dhabi Global Market (ADGM) was attended by Sheikh Mansoor bin Zayed al-Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, and executives from ICE, Adnoc and their partners in ICE Futures Abu Dhabi, both physically and virtually.

“The introduction of the world’s first Murban Futures contract is the latest step in Adnoc’s ongoing transformation into a more market and customer-centric organisation. By making Murban a freely traded crude, similar to Brent or WTI, customers have better price transparency, flexibilty to hedge and manage risks and increased access to Murban crude,” Adnoc said in a statement on 29 March.

“For Adnoc, its flagship crude grade becomes more available to a broader set of market participants around the world,” it said.

Alongside ICE and ADNOC, nine of the world’s largest energy companies and traders have joined IFAD as founding partners. This includes BP, GS Caltex, Inpex, Eneos, PetroChina, PTT, Shell, Total and Vitol.

Earlier in March, Adnoc announced that its Murban, Upper Zakum, Das and Umm Lulu crude grades will all be sold destination free, from June, allowing its crude oils to become a freely-traded commodity.

ICE Murban Futures are physically delivered contracts, with one futures contract equating to 1,000 barrels of Murban crude oil delivered from the Adnoc Terminal located in Fujairah.

Murban is Adnoc’s flagship crude grade, with production capacity of over 2 million barrels a day (b/d) at present. It currently accounts for around 50 per cent of the UAE’s total oil production capacity, with plans in place to increase the production of Murban to more than 2.5 million b/d by 2030, in line with ADNOC’s goal of growing its production capacity to 5 million b/d.

“Discovered in 1958, Murban has played a pivotal role as the bedrock of the UAE’s sustained economic development,” Adnoc said.

Sultan al-Jaber, UAE Minister of Industry and Advanced Technology, and Adnoc managing director and Group CEO, will virtually ring the opening bell of the iconic New York Stock Exchange, another of the international exchanges owned and operated by ICE, to celebrate the launch of IFAD and the new Murban Futures contract.

Murban Futures will trade globally on the ICE platform, one of the world’s foremost energy exchange networks. All trades clear through ICE Clear Europe, based in London. From today, Murban now trades alongside ICE Brent and ICE WTI in the ICE network.

Adnoc moved to forward pricing of its crude oil in March 2020 and previously priced Murban using Platts Dubai to determine its official selling price (OSP).

The state enterprise will move its forward pricing mechanism for Murban to the ICE Murban Futures Contract from June, coinciding with the first expiry of Murban Futures.

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