Mena energy companies to launch new oil benchmark

Abu Dhabi National Oil Company (Adnoc) and a number of international energy traders have teamed up with the Intercontinental Exchange (ICE) to develop the world’s first Murban crude oil futures contracts.

The futures, ICE Futures Abu Dhabi (IFAD) and ICE Murban Futures are set to be launched in early 2020 and the hope is that they will rival current crude oil benchmarks, WTI and Brent.

Murban is a light crude grade oil and Abu Dhabi currently produces around 3 million barrels a day with Adnoc accounting for 1.7 million barrels daily.

According to Adnoc group chief executive Sultan Ahmed Al jabber, “a new, independent exchange in Abu Dhabi will not only benefit the UAE but also physical and financial oil traders around the world”.

Adnoc and its partners, which include BP, Shell, Total, PetroChina and Vitol, are not alone in attempting to establish a rival oil benchmark. The Dubai mercantile Exchange operates a benchmark for the Dubai/Oman crude market.

Others have warned that the ambition to supplant WTI and Brent as the benchmark of choice will take some time. Speaking at a recent oil industry conference, Vitol chief executive Russell Hardy referenced the wide range of constituents involved in the trading of WTI and Brent, including pension funds and hedge funds. He added that “these things will take time to build up on the exchange here”.

©2019 funds global mena

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