ADNOC Proposes New Oil Pricing, Shifts Middle East Crude Benchmarks
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
ADNOCcrude-oil
Fazen Markets Editorial Desk
Collective editorial team · methodology
Trades XAUUSD 24/5 on autopilot. Verified Myfxbook performance. Free forever.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. Vortex HFT is informational software — not investment advice. Past performance does not guarantee future results.
Bloomberg reported on 1 July 2026 that Abu Dhabi National Oil Company proposed a new pricing methodology for its offshore crude supplies to term customers. The state-owned giant, which produced over 3.6 million barrels per day in 2025, is moving toward a structure more aligned with wider regional trading norms. This marks the first significant pricing overhaul for ADNOC's key grades in nearly a decade, directly affecting its main export streams like Upper Zakum and Umm Lulu.
The proposal emerges as Middle Eastern producers face sustained pressure to defend market share in Asia against rising competition. The last comparable pricing shift occurred in 2017 when Saudi Aramco changed its formula for Arab Light crude, linking it more closely to the Dubai Mercantile Exchange’s Oman futures contract. That move consolidated Dubai/Oman’s role as the primary Asian benchmark. The current macro backdrop features Brent crude trading near $78 per barrel and the Brent-Dubai spread, a key arbitrage indicator, holding around $2.50. The immediate catalyst is likely the expiration of existing term contracts and a strategic push to enhance the competitiveness of ADNOC's barrels against rival Iranian and Russian supplies flowing into China and India. Increased volatility in the dated Brent market, the Atlantic basin benchmark, has also driven Gulf producers to seek more regionally stable pricing references.
ADNOC’s total production capacity exceeds 4.5 million barrels per day. Its main offshore grades, Upper Zakum and Umm Lulu, typically trade at a differential to the Dubai Mercantile Exchange benchmark. In Q2 2026, the official selling price for Upper Zakum was set at Dubai +$0.85 per barrel. The proposed new methodology could shift this differential closer to the average of Oman futures contracts traded in the month of loading, a common practice for other regional crudes. The Brent-Dubai Exchange of Futures for Swaps (EFS) traded at $2.40 on 30 June. For comparison, Saudi Aramco’s flagship Arab Light crude for August delivery into Asia was priced at Oman/Dubai average +$2.40. ADNOC’s proposed change impacts a significant volume; the company’s term contracts for offshore crude cover several hundred thousand barrels per day. A 10-cent shift in the average differential could alter the value of monthly exports by over $10 million.
| Grade | Old Pricing Reference (Approx.) | New Proposed Reference (Likely) |
|---|---|---|
| Upper Zakum | Dated Brent/Dubai Blend | Oman Futures Average |
| Umm Lulu | Dated Brent/Dubai Blend | Oman Futures Average |
The proposed change is a net positive for the liquidity and dominance of the Dubai Mercantile Exchange and its Oman futures contract. Exchange operators like CME Group, which owns the DME, stand to benefit from increased trading volume and contract relevance. Oil refiners in Asia, particularly in Japan and South Korea, may face a period of recalibration in their hedging costs but could benefit from more transparent and regionally anchored pricing. A key counter-argument is that the shift could initially increase perceived price risk for some term buyers, potentially leading to a short-term reduction in contract volumes as they adjust models. However, the long-term effect is standardization. Trading desks at major commodity merchants like Vitol and Trafigura are already positioned for this shift, with flows increasing into Oman futures and related swap contracts in recent weeks. The move indirectly pressures other regional producers like QatarEnergy to review their own formulas to remain competitive.
Market participants will watch for the formal announcement of the new formula and its implementation date, expected before the end of Q3 2026. The next key pricing cycle for Middle Eastern crude occurs in early August when Saudi Aramco sets its official selling prices for September. The level of the Brent-Dubai EFS spread is critical; a widening above $3.00 could accelerate the adoption of Middle Eastern benchmarks. Traders will monitor trading volumes in DME Oman futures contracts for a sustained increase above the 2025 average of 4,000 lots per day. The reaction of Chinese independent refiners, major buyers of ADNOC cargoes, will signal commercial acceptance. Any significant deviation in the pricing of ADNOC’s new formula from the established Saudi differentials will create immediate arbitrage opportunities.
Retail investors gain exposure through energy sector ETFs like XLE or crude oil futures products. A successful shift strengthening Middle East benchmarks could reduce volatility for funds tracking regional indexes. However, the direct price impact on global Brent or WTI benchmarks is likely muted, affecting the relative price spread between Atlantic and Asian crudes more than the absolute price level.
Saudi Aramco’s 2017 change explicitly tied its Asian prices to the DME Oman futures average, a decisive move that solidified that contract. ADNOC’s proposal appears to follow this precedent but applies specifically to its offshore grades. The 2017 shift was broader, affecting all of Aramco’s Asian exports, and led to a measurable increase in DME trading volumes by 25% within twelve months.
The Brent-Dubai spread reflects the price difference between Atlantic basin and Middle Eastern crude. It averaged $1.80 from 2015-2020 but has experienced wider swings post-2022, reaching over $6.00 during periods of European supply disruption. A narrower spread makes Middle Eastern crude more attractive to European refiners, while a wider spread locks it into Asia. ADNOC’s move aims to decouple its prices from this volatile arbitrage linkage.
ADNOC's pricing proposal accelerates the financialization of Middle East crude benchmarks at the expense of dated Brent.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
Vortex HFT is our free MT4/MT5 Expert Advisor. Verified Myfxbook performance. No subscription. No fees. Trades 24/5.
Trade oil, gas & energy markets
Start TradingSponsored
Open a demo account in 30 seconds. No deposit required.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.