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The World’s Newest Oil Benchmark

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This week has witnessed a great flurry of news regarding the creation of a new Middle Eastern benchmark from the UAE flagship crude Murban. Intercontinental Exchange stated it will list Murban next year – partnered by Total, Shell, BP, Vitol and others – with the stated aim of creating a transparent, regulated and commercially usable Middle Eastern benchmark. Setting up Murban would be revolutionary, especially for ADNOC as it would provide the first light Middle Eastern benchmark. It would be terrific news for Asian refiners who, at last, would have to deal with UAE crudes, knowing the pricing environment in advance and being able to act upon it. Yet Murban has a few bugs which need to be fixed, clarifying ADNOC’s long-term commitments to the grade’s universal applicability.

There are several consequential considerations that ought to compel Middle Eastern producers to seek a new benchmark. Trade flows in the traditional domain of crudes from the United Arab Emirates or Kuwait – Asia – have been undergoing a thorough transformation. As we have established in our special report on US exports, the inflow of American barrels has pushed West African and North Sea crudes into Asia, all the while finding a special niche of its own with Asian refiners, too. Concurrently, the OPEC+ production cuts have primarily impacted the supply side of medium sour crudes, only fortifying the overall refinery slate lightening trend that has been taking…




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