The historic launch of Murban trading on the new ICE Futures Abu Dhabi (IFAD) exchange not only signals the UAE's bold efforts to cement its status as a global energy major for years to come, but it also marks the first time an Opec member from the Arabian Gulf has permitted its crude to be sold and exported freely anywhere in the world.
The Abu Dhabi National Oil Company (Adnoc) and the Intercontinental Exchange (ICE) welcomed the start of trading on the IFAD commodities exchange of the UAE's flagship crude oil as the main futures contract, signalling a significant shift in how Abu Dhabi prices its crude exports.
The ICE Murban Futures are physically-delivered contracts, with one futures contract equalling 1,000 barrels of Murban crude delivered from Adnoc’s storage terminal in Fujairah. Murban's emergence as a freely traded crude, akin to Brent in Europe or WTI in the United States, will not only provide a more favourable and straightforward pricing process for the energy sector and its consumers, but will also expand global access to the UAE's prized oil, making it more attractive to refiners in key markets.
BP, ENEOS, GS Caltex, PetroChina, Shell, and TOTAL are among the existing Murban crude customers and concession holders who support IFAD.
Significantly, IFAD contracts will be cleared at ICE Clear Europe alongside other global oil benchmarks including ICE Brent, ICE WTI, and ICE (Platts) Dubai, enabling its customers to take advantage of related margin offsets at the exchange.
The IFAD trading paves the way for Murban to emerge as a new benchmark for the oil industry, setting the bar for pricing oil in the Middle East and North Africa (Mena) area, despite the fact that the crude grade accounts for more than half of the UAE's total production. Indeed, with Brent's performance dwindling, Murban might easily outperform current benchmarks.
Although the UAE has made significant progress in diversifying its economy over the years, the Murban trading on IFAD also reflects the country's desire to optimise its crude assets and build new opportunities within the hydrocarbon sector – which accounts for around 30% of its GDP – alongside long-term green investment strategies.
Murban, discovered in 1958, has become synonymous with the UAE's rise as a modern economic powerhouse, serving as the backbone of the country's long-term growth. It now adds to that distinction by increasing the UAE's competitiveness on the global energy map and paving the way for the next stage of the country's growth.