Murban: An emerging benchmark for global oil traders

UAE

Gary King, president of ICE Futures Abu Dhabi (IFAD), talks to The Energy Year about launching Murban Crude Oil Futures and the growing confidence in the contract among the global energy community. ICE launched IFAD in 2021 with ADNOC and founding partners from nine of the world’s largest energy companies as a venue to trade the Murban Crude futures contract.

What is the significance of having Murban as a global oil benchmark?
It’s very important. Our goal in establishing this market was to increase the global reach of Murban and give a global participant base more options to manage risk and clear trades. It was part of the vision of the UAE and the growth of ADNOC to put Murban in the mix of global oil benchmarks. It has expanded the country’s brand and created a risk management tool for the global energy community. We are very fortunate and happy to be part of this ecosystem and delighted to have the Murban contract to trade alongside Brent, which is the global benchmark for crude oil.
What we’re seeing today, three years on from launch, is that Murban is more widely available to both physical purchasers of crude oil and financial market participants around the world, reinforcing ICE’s role in global oil markets and the UAE’s role as a global energy supplier. We are very happy to see continued growth in trading volumes and open interest in the contract.

What were some of the elements you considered when creating the Murban futures contract?
It’s a journey where you have to work intensively with the international community because you have to develop products that are required by the marketplace. That’s the starting point. In the end, we provide tools for people to manage price risk by providing price discovery and by allowing them to manage their exposure.
It took a lot of time and work with regulators across several jurisdictions. It was an effort across our international organisation. Spending time with the market was absolutely essential. We had to know the requirements of the participants and build a relationship of trust with them. The performance of the Murban futures contract is a testament to what we achieved. The number of contracts traded, the number of players involved and the record volumes of physical deliveries have been very robust. It has performed very well.
Since IFAD launched, over 9.8 million Murban futures contracts have traded, the equivalent to approximately 9.8 billion barrels of Murban crude oil, as 355 million barrels of Murban have been delivered through IFAD. Over 180 participants have traded on IFAD to date from across the US, Europe, Asia and the Middle East, including commercial and financial participants.

After this year’s record trading volumes, what are your expectations for 2025?
We want to keep building on the success, and that’s what we are doing. We want to continue to grow liquidity because liquidity begets liquidity. We want more traders and more risk managers in the market. They will come as more people become familiar with the contract and gain confidence in Murban as a tool they can use to manage price risk.
Murban is still quite new in the energy ecosystem. Brent has existed for around 40 years, and it has evolved a lot. Looking at where we are now, I think it’s been a very good start.

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