Samer Choucair: ADNOC’s Shift to Platts Dubai Opens a New Phase in Oil Hedging and Investment
Entrepreneur Samer Choucair said Abu Dhabi National Oil Company’s decision to adopt the monthly cash Platts Dubai benchmark for pricing its onshore and offshore crude grades from 1 November 2026, replacing Murban futures traded on ICE Futures Abu Dhabi, represents a structural shift in the regional oil market.
He explained that the move reflects a clear effort to align pricing more closely with actual loading conditions and enhance transparency for customers and investors.
Choucair noted that the decision followed months of severe volatility across regional markets and carries important implications for institutional investors, as it will reorganize hedging flows and liquidity across Gulf and Asian oil markets while directly influencing capital-allocation decisions in energy and commodities.
The largest oil-pricing adjustment since the launch of Murban futures
Samer Choucair said the move represents one of the most significant changes to the Middle East’s oil-pricing system since the launch of Murban futures in 2021.
Official selling prices were previously determined two months before loading based on the average price of Murban futures. Under the new mechanism, prices will be linked to the Platts Dubai assessment for the relevant cash month, together with a differential announced by ADNOC during the month preceding loading.
Choucair added that the decision applies to Murban, Das, Umm Lulu, and Upper Zakum crude, creating a unified pricing mechanism for both onshore and offshore production.
Regional volatility accelerated the change
Samer Choucair noted that Middle Eastern oil markets experienced exceptional volatility during recent months, driven by concerns over possible disruption to export flows through the Strait of Hormuz.
At certain points, Murban futures rose above $160 per barrel, causing substantial hedging losses for some trading companies and Asian refiners.
Choucair added that ADNOC had already begun selling spot cargoes in June at differentials linked to the Dubai benchmark, describing the move as a practical precursor to the full implementation of the new system.
He noted that the company said the decision formed part of a routine commercial review and reaffirmed its commitment to providing reliable supplies supported by its trading, shipping, and logistics capabilities.
ADNOC also indicated that the change would not materially affect its listed financial instruments, including bonds, medium-term debt issuances, and Murban-linked sukuk.
More efficient risk management
Samer Choucair emphasized that the transition reflects a higher level of maturity in risk management among Gulf producers.
Moving to a cash benchmark connected to the actual loading month significantly reduces basis risk between physical prices and futures contracts, an approach preferred by institutional investors managing substantial commodity portfolios across Asia and Europe.
Choucair said he expects some liquidity to move gradually from Murban futures toward instruments linked to the Dubai benchmark, potentially reshaping the structure of hedging across regional oil markets during the coming period.
Strengthening competitiveness in Asian markets
Samer Choucair explained that adopting Platts Dubai strengthens the connection between ADNOC’s crude grades and the principal benchmark for medium-sour oil supplied to Asian markets, where the Middle East is the largest source of refinery feedstock.
He noted that unifying the pricing mechanism across ADNOC’s different crude grades will simplify price comparisons with other regional benchmarks, including Oman and Al Shaheen crude.
This could strengthen the company’s competitiveness in both spot tenders and long-term supply agreements.
Direct implications for capital flows
Samer Choucair said equity and bond markets connected to the energy sector may view the decision positively, as it demonstrates ADNOC’s flexibility in adapting to geopolitical change.
The Dubai benchmark is expected to experience increased liquidity, while open interest in Murban futures may decline, particularly after ICE Futures Abu Dhabi announced the suspension of contracts with no outstanding positions.
Choucair added that investors in commodity funds and sovereign wealth funds will closely monitor the movement of trading volumes between the two benchmarks.
Greater pricing transparency could attract new investment flows into assets connected to Gulf oil, particularly while Asian demand remains strong.
He emphasized that these developments may also support long-term investment in energy infrastructure, trading, and logistics, in line with the economic-diversification strategies pursued by Gulf countries.
Continuing risks and strategic opportunities
Samer Choucair identified continuing geopolitical volatility affecting Platts Dubai assessments and the possibility that some Asian refiners may require time to adapt to the new system as the principal potential risks.
He said ADNOC nevertheless has significant opportunities to strengthen its position in Asian markets and support its capacity to expand production and exports following the United Arab Emirates’ departure from OPEC.
Choucair added that the development strengthens the UAE’s position as a trusted regional oil-pricing centre and creates opportunities for new strategic investment in refining, trading, and shipping.
Investment institutions prioritizing governance and transparency are likely to regard the new mechanism as a positive factor in their risk assessments.
Future outlook
Concluding his remarks, Samer Choucair said institutional investors will focus during the period preceding November on the pricing differentials announced by ADNOC and on changes in liquidity between the Dubai benchmark and Murban futures.
He noted that, should Asian demand remain strong while supplies remain relatively stable, the transition could help improve the stability of returns across the Gulf oil sector over the medium term.
Samer Choucair concluded that ADNOC’s decision represents a practical move toward a pricing mechanism more closely aligned with the operational realities of the market.
He said this is consistent with the requirements of global markets in an environment characterized by elevated uncertainty, adding that the response of institutional capital to the transition will provide an important indication of future investment trends across the energy sector.