Mena energy companies to launch new oil benchmark for Murban

The Abu Dhabi National Oil Company (Adnoc) and a number of international energy traders have teamed with the Intercontinental Exchange (ICE) to develop the world’s first murban crude oil futures contracts. Futures ICE Futures Abu Dhabi (IFAD) and ICE Murban Futures are expected to be launched in early 2020.

The hope is that they can keep up with the current crude oil benchmarks WTI and Brent. Murban is a light crude oil and Abu Dhabi currently produces around 3 million barrels a day, with Adnoc producing 1.7 million barrels a day. According to Sultan Ahmed Al Jabber, Adnoc Group CEO, “A new, independent exchange in Abu Dhabi will not only benefit the UAE, but also oil traders around the world.” Adnoc and its partners, which include BP, Shell, Total, PetroChina and Vitol, are not alone in trying to establish a competing oil benchmark. The Dubai Stock Exchange operates a benchmark for the crude oil market of Dubai / Oman.

Others have warned that the ambition to oust WTI and Brent as the benchmark of choice will take some time. At a recent oil industry conference, Vitols CEO Russell Hardy referred to the broad range of constituents involved in trading in WTI and Brent, including pension funds and hedge funds. He added that “these things will take time to build on the exchange here.”

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