Abu Dhabi is restructuring its oil sales approach, stepping back from its attempt to create a global crude benchmark to compete with Brent. The emirate’s national oil company, Adnoc, announced that it will cease selling its flagship grade, Murban crude, on an open market and will instead return to a quota-based system with prices linked to established benchmarks set in Dubai. This shift is set to take effect in November following a routine commercial review.
Five years ago, Abu Dhabi sought to innovate within the Gulf oil market by pricing Murban through a futures contract traded on ICE Futures Abu Dhabi. This move was hailed by Sultan al-Jaber, Adnoc’s CEO, as a historic development that would allow customers to better price, manage, and trade Murban crude. Unlike other major Gulf producers such as Saudi Arabia, which price their oil mainly through long-term contracts referencing existing benchmarks like Dubai, Abu Dhabi aimed to establish Murban as a freely tradeable benchmark. The objective was for Murban to gain status alongside Brent, the dominant global crude benchmark, and West Texas Intermediate, the main US marker.
The initiative gained added significance earlier this year when the United Arab Emirates announced its intention to leave the Organization of the Petroleum Exporting Countries (OPEC). This decision potentially enables the UAE to increase oil production beyond 5 million barrels per day by next year.
However, the volatility caused by the recent conflict involving Iran revealed critical weaknesses in the Murban futures market structure. The contract is settled approximately two months before physical oil loading takes place, a timing that caused pricing discrepancies under tense geopolitical conditions. When Iranian forces exerted pressure that temporarily closed the Strait of Hormuz, a key shipping route, Murban crude—which is exported from Fujairah, a port outside the strait—experienced a sharp price increase due to a perceived security-of-supply advantage. This premium was applied to futures contracts for cargoes loading weeks later, even after the disruption eased, leading to complaints from buyers over the pricing mismatch.
Market participants have expressed concerns over Adnoc’s decision to move away from the Murban futures contract, with some suggesting it could undermine the future of the ICE Futures Abu Dhabi exchange. One crude trading specialist described the move as “totally finished,” noting that it takes significant resolve to abandon a market instrument a company has developed.
Adnoc has reaffirmed that the change is part of a regular commercial assessment and reflects a response to market dynamics rather than a definitive end to its ambitions in pricing innovation. The reverberations of this shift will be closely watched by industry stakeholders as they assess the implications for regional crude benchmarks and global oil trading patterns.