UAE Rewrites Offshore Oil Pricing To Capture Asian Markets
India Coal Power Generation Jumps 14% in June Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.
Previously, wereportedthat Abu Dhabi’s flagship crude, Murban crude, has rapidly risen to prominence, with Murban crude futures having rapidly evolved from a regional benchmark into a primary global pricing standard.
Known for its high API gravity and low sulfur content, Murban serves as a globally recognized energy benchmark traded on the ICE Futures Abu Dhabi (IFAD) exchange.
By offering continuous screen-trading, deep liquidity and the removal of destination restrictions, Murban has bypassed older, restricted benchmarks like Platts Dubai, introducing unprecedented transparency and price discovery to Middle Eastern crude.However, the Middle East conflict has upended oil market dynamics, giving Asian refiners a distinctive advantage.
(ADNOC) is nowtransitioningthe Official Selling Prices (OSPs) for its three offshore crude grades--Upper Zakum, Das, and Umm Lulu--from a differential againstMurban futuresto a differential against the Dubai benchmark.
This change will apply to prompt cargoes loading two months ahead, while the flagship Murban crude remains tied to Murban futures.
ADNOC’s decision to price its offshore crude grades against the Dubai benchmark instead of Murban corrects a structural economic distortion that has penalized buyers for years.
Murban is a premium, light-sweet crude grade, whereas the offshore grades—Upper Zakum, Das, and Umm Lulu—are medium-sour barrels, yielding completely different product slates.Duringthe heightof the U.S.-Iran conflict, extreme market backwardation and sudden premium demand for light ends caused front-month Murban futures on the IFAD exchange to surge.
Because Upper Zakum and Das were priced as a differential pegged directly to Murban, these medium-sour barrels became artificially and prohibitively expensive for Asian refiners, completely detached from their actual physical market fundamentals.
By shifting the offshore grades to a Dubai-linked formula—the undisputed global baseline for medium-sour crude—ADNOC is realigning these crudes with their true physical peers, such as Oman and Qatar’s Al-Shaheen.
Related: Kuwait Wants Consortiums to Bid for $7 Billion Oil Pipeline Deal Expecting a prolonged disruption,refiners across Asiasecured alternative supplies, including premium-priced U.S.
WTI and West African crude, leaving most July and August requirements already covered.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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