Abu Dhabi National Oil Co. (ADNOC) is working to establish Murban, a type of light sweet crude, as a new benchmark for oil produced in the Middle East in the near future. It has teamed up with International Exchange Inc. to set up contracts for this grade and will launch a new commodities exchange that can begin trading Murban futures next year.
To boost its chances of success, ADNOC is trying to talk trading firm and oil companies into acquiring minority stakes in the new exchange, sources with knowledge of the matter told Bloomberg. The company is doing so in a bid to improve the Murban contract’s liquidity, they said.
It is too soon whether this campaign will succeed. Even so, some industry observers are cautiously optimistic.
“There is a need for a new marker to reflect shifting crude flows,” Ahmed Mehdi, a research associate at Oxford Institute for Energy Studies (OIES), told Bloomberg. “Murban has many of the characteristics for benchmark success: large physical volumes, its availability for spot trading, and potential for a forward paper market.”