Abu Dhabi’s Oil Giant Draws Trader Ire With Murban Supply Muddle
(Bloomberg) -- Confusion around Abu Dhabi National Oil Co.’s supply of its flagship crude grade for this month has left traders frustrated and questioning official messaging around output.
At the heart of the issue is predictability. Traders say Adnoc needs to give consistent signals about volumes to enable a stable physical-trading framework. Abu Dhabi also has ambitions for Murban to become a regional benchmark, establishing futures contracts on a regulated exchange four years ago.
Last month, Adnoc indicated it would reduce volumes of its flagship Murban crude for July, but then some buyers said they were notified they would get their full amount. That followed an unexpected cut to future monthly exports at the end of May, just days after an initial forecast on shipments into 2026.
“It creates a reputational risk,” said Jorge Montepeque, a managing director at Onyx Capital Group, who spent nearly three decades at S&P Global Inc. where he helped run the Platts oil benchmarks. The situation “definitely erodes confidence” in Adnoc, he added.
Adnoc supply issues also contributed to a big reduction in trading activity on a window run by S&P Global Commodity Insights last month which helps set the Middle East’s Dubai benchmark, said traders. Only three full cargoes of oil changed hands — none of them Murban — far below typical levels.
A spokesperson for Adnoc, the government-owned oil company of Abu Dhabi in United Arab Emirates, said the company fulfills its commitments to project partners and customers, and has maintained uninterrupted supply.
Still, the uncertainty has prompted some traders to seek more supply security such as pursuing term contracts over spot deals, since Murban is a mainstay for many Asian refiners and pivoting to other oil grades is difficult, according to people familiar with the matter, who asked not to be identified discussing private information.
The issue around July volumes likely caused trading losses for some due to a mismatch in hedging positions against expected supply.
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