Murban Crude Jumps to 4-Month High as ADNOC Curbs Supply to Asia

Murban Crude, the primary grade of the United Arab Emirates, reached a four-month peak price this week, as the UAE's national oil company, ADNOC, prepared to decrease its immediate crude shipments to Asia. Sources close to the situation reported to Bloomberg that ADNOC intends to reduce its spot tender supply to Asian buyers by around 5% in the upcoming months.

This lower crude oil supply to Asia will stem from scheduled maintenance on some of ADNOC's onshore fields in Abu Dhabi, according to another source cited by Bloomberg. As of this week, Murban Crude was trading at a premium of nearly $7 per barrel over Brent crude futures, sitting at $97.75 a barrel, marking the highest such premium since early April.

That month saw the greatest premium for Murban to Brent due to supply constraints in the Middle East, following the closure of the Strait of Hormuz. Previously, Murban Crude had been trading at a discount to Brent Crude between the end of April and early August, with a single-day spike occurring on July 23 when the U.S. launched airstrikes on targets in Iran following the collapse of the 'deal to make a deal'.

Since June, ADNOC has sold over 100 million barrels in spot tenders as it endeavors to sell more crude volumes to global markets, having surpassed OPEC's output by June. The UAE has managed to lift its oil exports back to pre-crisis levels, continuing to transport crude through the Strait of Hormuz and beyond, maximizing the use of its onshore pipeline by shipping crude from the west of the country to the east, avoiding the Hormuz chokepoint.