New Delhi: Abu Dhabi National Oil Company (ADNOC) will change the way it prices its crude oil from 1 November, a move that is expected to better reflect current market conditions and make it easier for Asian buyers, including India, to purchase and manage the cost of its crude.
According to Umud Shokri, a US-based energy expert and senior visiting fellow at George Mason University, the revised pricing system “should reflect current market conditions more accurately and make it easier for Asian customers to price and hedge ADNOC crude”.
New pricing formula is expected to improve transparency and better reflect market conditions, with analysts seeing a modest benefit for Asian buyers, including India.
For India, the impact is expected to be neutral to slightly positive. Shokri said the new system would reduce pricing delays and make ADNOC’s crude easier to compare with other Middle Eastern grades. However, he added that India’s import bill would continue to depend on global crude prices and freight rates rather than on the pricing methodology itself.
The change is significant for India as it is one of the largest buyers of ADNOC’s crude, alongside China, South Korea and Japan. In July, ADNOC supplied around 4,58,000 barrels per day of crude to India, making the UAE India’s second-largest crude oil supplier after Russia.
As part of the change, ADNOC will replace its existing Murban futures-based pricing system with one linked to the Platts Dubai benchmark, a widely-used price reference for Middle Eastern crude exported to Asia.
Under the revised methodology, the official selling price (OSP) of ADNOC’s four main crude grades—Murban, Das, Umm Lulu and Upper Zakum—will be based on the prompt-month Platts Dubai benchmark, along with a premium or discount announced by the company in the month before delivery.
Currently, these grades are priced using the ICE Futures Abu Dhabi (IFAD) Murban futures contract, with prices fixed around two months before cargo loading. ADNOC said the new mechanism will align prices more closely with the actual month of loading while improving pricing transparency for customers and investors.
The Platts Dubai benchmark, published by S&P Global Commodity Insights, is one of the main price references for medium sour crude exported from the Middle East to Asia and is widely used by refiners and producers in the region. By contrast, the Murban futures contract lets traders agree on the price of Murban crude before it is delivered in the future.
The pricing overhaul has also sparked speculation over whether it reflects the UAE’s changing oil strategy after its exit from OPEC+ (Organization of the Petroleum Exporting Countries and its allies) earlier this year.
The UAE left the producer alliance citing differences over production policy and a desire for greater flexibility to increase output in line with its expanding production capacity.
Shokri, however, said the pricing change should not be interpreted as another step in that direction. Instead, he described it as a commercial decision aimed at responding to market volatility and customer demand.
While some oil-producing countries may introduce more flexible pricing mechanisms to remain competitive in Asian markets, he said a wider shift to ADNOC’s model is unlikely, as most Gulf producers already price their crude against regional benchmarks such as Dubai and Oman rather than their own futures contracts.
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