Abu Dhabi National Oil Co. (ADNOC) is proposing a change in its crude oil pricing methodology for term customers, aligning it more closely with wider regional trading standards. The company's crude marketing team has reportedly engaged with refiners and traders in Singapore and Japan to explain these proposed changes.
Under the new plan, monthly Official Selling Prices (OSPs) for Upper Zakum, Das, and Umm Lulu crude grades, all originating from within the Persian Gulf, would be set as a differential to the Dubai benchmark for cargoes scheduled for loading two months ahead. Currently, ADNOC sets the OSPs for these three grades based on a differential to Murban futures, which are traded on the ICE Futures Abu Dhabi platform. No changes have been proposed for the OSP formulation of Murban crude, which is Abu Dhabi's flagship grade.
This shift, if implemented, would facilitate easier comparison of the pricing of these grades with other regional varieties such as Oman and Al-Shaheen, which commonly trade against the Dubai benchmark in the spot market. Market analysts suggest this move could also support ADNOC's strategy to increase crude production and shipments, particularly following the United Arab Emirates' exit from the Organization of the Petroleum Exporting Countries (OPEC) in May. ADNOC has not provided an official comment on the proposed changes, and no specific timeline for review or implementation has been disclosed.
