ADNOC Unveils New Crude Pricing Mechanism

ADNOC is changing the pricing formula used for its flagship crude grades.The oil giant said Friday it will move away from its ICE Futures Abu Dhabi-based pricing methodology, which prices crude off the Murban futures contract two months ahead of loading, and switch to a prompt-month system built around the Platts Dubai benchmark. The change takes effect Nov. 1 and covers all four of ADNOC's Abu Dhabi grades: Murban, Das, Umm Lulu and Upper Zakum.Under the new formula, ADNOC will set official selling prices using the Platts Dubai assessment plus a company-announced differential, disclosed the month before the target delivery month. The company says the change aligns pricing more closely with the actual month crude loads, replacing a system that had set prices two months out since the IFAD Murban contract launched in 2021.That launch made Murban the first Middle East crude grade with its own tradeable futures contract, and ADNOC spent years building it as a regional alternative to Brent and WTI. Five years later, the company is now using that contract to set its own official prices, even as trading in the futures contract itself continues.The move follows a narrower proposal reported by MEES earlier this month, which had ADNOC's offshore grades shifting to Dubai while Murban stayed on futures pricing. Friday's announcement goes further, pulling Murban itself, which accounts for roughly two-thirds of ADNOC's output, into the Dubai-linked system.It also comes three months after the UAE's exit from OPEC and OPEC+, effective May 1, which freed ADNOC from production quotas and gave it more room to set its own commercial terms. Analysts have framed the exit as part of a broader push toward strategic autonomy in how Abu Dhabi manages its energy business, and this pricing switch fits that pattern.Platts had already been adjusting how Murban factors into the Dubai basket. The price agency removed the floor tying Murban's value to Dubai back in January, after years of rising Murban supply and shrinking medium-sour barrels pushed the grade into a bigger role in setting the benchmark. ADNOC's move now formalizes that shift on the seller's side, too.ADNOC said the change won't materially affect any of its listed instruments, including bonds issued under the ADNOC Murban GMTN and Sukuk programs, and that it will keep meeting delivery obligations across its onshore and offshore grades. The company framed the update as a routine commercial review aimed at improving pricing transparency for customers and investors, though the timing, a few months removed from the OPEC exit, suggests something bigger than routine.By Charles Kennedy for Oilprice.comMore Top Reads From Oilprice.comSix Saudi Oil Tankers Reroute Around Africa to Dodge Houthi ThreatOil Prices Inch Higher as Iran Strikes U.S. Bases in Kuwait andShell Sells Cyprus Gas Stake to MOL for $720 Million