Abu Dhabi National Oil Company rang the opening bell at the New York Stock Exchange to celebrate the launch on Monday of crude futures contracts tracking the UAE's flagship Murban grade.
Murban joins the ranks of Brent, the most widely-traded oil benchmark, and US gauge West Texas Intermediate in pricing and trading oil.
Jeffrey Sprecher, chairman of ICE, and Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, Adnoc managing director and group chief executive, rang the opening bell in an online ceremony to mark the occasion.
"We believe on its very first day Murban will become a globally recognised benchmark," Mr Sprecher said in a video message earlier on Monday.
The Abu Dhabi grade, which flows at approximately 1.7 million barrels per day, accounts for half of the UAE's production.
Murban fills a void in oil trading and pricing in the Middle East, which is the biggest supplier of crude to global energy markets.
The crude grade's international role is supported by Adnoc's recent removal of destination clauses in its trade.
The Abu Dhabi commodities exchange, on which Murban crude futures will be bought and sold, is operated by Intercontinental Exchange, also known as ICE. ICE is also responsible for the Brent benchmark, under which two-third's of the world's oil is traded. It is also the parent of NYSE.
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Read more: Dr Sultan Al Jaber: Murban Futures mirror the UAE's rise on the world stage
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The ICE Futures Abu Dhabi Exchange is backed by oil companies such as Thailand’s PTT, Japan’s JXTG and Inpex, BP, France’s Total, South Korea’s GS Caltex, PetroChina, Anglo-Dutch major Shell and Vitol. The companies are operators and off-takers of Abu Dhabi crude, particularly those destined for Asia.
Adnoc's other crude grades, Upper Zakum, Das and Umm Lulu, will be priced at a differential to Murban.
Murban was trading at $64.03 per barrel at 3pm UAE time with 6,293 lots of futures and 2,510 related cash-settled derivatives, Intercontinental Exchange said on Twitter. Brent, the international benchmark, was up 1.05 per cent trading at $65.25 per barrel at 3.14pm UAE time. WTI was gained 0.95 per cent to trade at $61.55 per barrel.
Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, attended the launch of Murban crude futures trading at Abu Dhabi Global Market on Al Maryah Island on Monday.
In a tweet after the event, Sheikh Mansour said the trading of Murban crude futures would enhance the UAE's global competitiveness.
Posting on twitter ahead of the launch, Sheikh Saif bin Zayed, Minister of Interior and Deputy Prime Minister, said the trading of Murban crude futures “will enhance the position of the UAE capital as a leading and global energy centre”.
Murban establishes Abu Dhabi as a 'world class' commodities hub, Adnoc CEO says
Dr Al Jaber said the trading of Murban futures is a milestone for Adnoc and its partners.
"This represents a significant milestone for Adnoc, ICE, our customers and of course our partners,” he said.
"We will establish Abu Dhabi as a world class commodities trading hub.
"That is simply the case because starting today Murban futures will be freely traded from Singapore, and from Abu Dhabi, to New York. In fact, whenever there is a trading screen, Murban will be on that screen," he added.
The contract for future delivery can be traded 22 hours a day, five days a week.
Murban, a light, sweet type of crude, is popular in the Asian markets.
"Murban came from humble beginnings, from with just one oil field in 1958 and only 4,000 bpd of production. Now it flows from 2,000 wells and 12 fields and accounts for more than half of the UAE's total oil production," Dr Al Jaber said.
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Read more: Robin Mills: Abu Dhabi's Murban futures will enhance the efficiency of global oil pricing
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It is chosen for its stability and "capacity to meet increased demand", he added.
The new contract represented "a great value proposition" across the entire crude trading value chain, Dr Al Jaber said.
"[It's] a win win for everyone involved, customers will be able to better manage market risks. While more value will be created for producers," he added.
The launch of a new crude futures contract and the setting up of a new exchange will "boost liquidity and add vibrancy" to the capital markets in Abu Dhabi, according to Ahmed Al Sayegh, Minister of State and executive chairman of ADGM.
The launch of a futures contract for Murban will also "increase arbitrage trading opportunities, regionally, and globally," said Mr Al Sayegh said during the event.
The new benchmark will allow for more options to manage risk and clear trades, he added.
"For international investors, this delivers greater and more efficient access to our region ... it means doing more business closer to home," Mr Al Sayegh said.
Murban to offer more 'transparency' to global oil markets
The trading of a new benchmark based on a single, high-quality Middle East crude will offer more "transparency" to global oil markets, particularly to customers in Asia, chief executives of international energy companies said on Monday.
"There is a lack today, in the eastern hemisphere of a strong benchmark which is essential for developing the markets. It is for good for customers [and] good for producers," said Patrick Pouyanne, chairman and chief executive at France's Total.
"Murban has a strong advantage ... it is a quality crude."
Mr Pouyanne attended the launch in Abu Dhabi on Monday.
He was joined online by Bernard Looney, chief executive of BP, Takayuki Ueda, president chief executive of Japan's Inpex, as well as Russel Hardy, chief executive of trading company, Vitol, the world's largest oil-trading company. They are backing the Murban futures contract and the Abu Dhabi commodities exchange.
Brent, under which two-thirds of global crude is traded, is calculated on the basis of production from fields in the North Sea. However, output from the crude in the North Sea is in the decline, making it an unreliable indicator of global trade in crude. WTI tracks US crude grades and reflects output from different variants of oil in the world's largest producer of oil and gas.
Murban, on the other hand, offers a simpler, more stable trading option.
The new Abu Dhabi exchange and the Murban benchmark will help an oil-producing region like the Middle East "manage the risks and also to meet the growing energy demand", said BP's Mr Looney.
Murban will now be accessible to a "larger number of customers and contribute to further economic and social development in many parts of the world including in Asia", said Inpex's Mr Ueda.
Adnoc's removal of destination clauses on the trading of Murban was an "important thing" to help begin the trade flow, said Vitol's Mr Hardy.
A new futures contract for Murban will "reduce the uncertainty and improve the pricing for everybody as we move forward", he added.
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
How it works
Each player begins with one of the great empires of history, from Julius Caesar's Rome to Ramses of Egypt, spread over Europe and the Middle East.
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A dice-based battle system is used and players can get the edge on their enemy with by deploying a renowned hero on the battlefield.
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'The Lost Daughter'
Director: Maggie Gyllenhaal
Starring: Olivia Colman, Jessie Buckley, Dakota Johnson
Rating: 4/5
Company%20Profile
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UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
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Director: Lee Isaac Chung
Starring: Glen Powell, Daisy Edgar-Jones, Anthony Ramos
Rating: 2.5/5
Ms Yang's top tips for parents new to the UAE
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GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
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Rating: 3.5/5
The biog
Fatima Al Darmaki is an Emirati widow with three children
She has received 46 certificates of appreciation and excellence throughout her career
She won the 'ideal mother' category at the Minister of Interior Awards for Excellence
Her favourite food is Harees, a slow-cooked porridge-like dish made from boiled wheat berries mixed with chicken
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What is Reform?
Reform is a right-wing, populist party led by Nigel Farage, a former MEP who won a seat in the House of Commons last year at his eighth attempt and a prominent figure in the campaign for the UK to leave the European Union.
It was founded in 2018 and originally called the Brexit Party.
Many of its members previously belonged to UKIP or the mainstream Conservatives.
After Brexit took place, the party focused on the reformation of British democracy.
Former Tory deputy chairman Lee Anderson became its first MP after defecting in March 2024.
The party gained support from Elon Musk, and had hoped the tech billionaire would make a £100m donation. However, Mr Musk changed his mind and called for Mr Farage to step down as leader in a row involving the US tycoon's support for far-right figurehead Tommy Robinson who is in prison for contempt of court.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
