GS Caltex President HurSae-hong participates in a ceremony to open IFAD held at the Abu Dhabi Global Market on March 29. (Photos: GS Caltex)

GS Caltex President Hur Sae-hong.

GS Caltex teamed up with global energy companies to establish the ICE International Exchange Futures Abu Dhabi, or IFAD, and launch trading ICE Murban Crude Oil futures.

IFAD is a futures exchange launched by Abu Dhabi National Oil Company (ADNOC), the International Exchange (ICE), the world’s largest exchange group, and nine energy companies, including GS Caltex, BP, Total, Inpex, Vitol, Shell, PetroChina. GS Caltex joined in the establishment of IFAD as a shareholder.

It is the first time a Korean refinery company joined in the establishment of a futures exchange as a shareholder. IFAD trades Murban crude, the United Arab Emirates’ flagship crude.

A shift of the current spot trade into a futures trade is expected to enable a fair and stable crude transaction.

GS Caltex President Hur Sae-hong participated in a ceremony to open IFAD held at the Abu Dhabi Global Market on March 29, which was held online.

Also on hand at the event were Sheikh Mansoor Bin Zayed Al Nahyan, UAE deputy prime minister and minister of presidential affairs, and officials from ICE, ADNOC and the partnering companies. Murban crude is widely used in Asia, and it is purchased by refineries from more than 60 countries.

Murban accounts for an upward 50 percent of ADNOC’s total crude production. ADNOC produces the flagship crude grade of over 2 million barrels per day at present.

The company plans to increase the production of Murban to more than 2.5 million barrels per day by 2030, in line with the goal of growing its production capacity to 5 million barrels of crude per day.

GS Caltex is a major Murban crude buyer, importing 34 million barrels, or 13 percent of its total crude amounts, standing at 260 million barrels last year. The portion of Murban is the highest single crude for GS Caltex.

GS Energy, the mother company of GS Caltex, participates in two ground crude production mining areas in which the former has the right to secure 560 million barrels to be produced over 40 years.

GS Caltex President Hur said, “Murban crude will establish itself as a global benchmark crude standard down the road.”

Currently, the world’s top three benchmark crude prices are the Unites States’ West Texas Intermediate (WTI), UK’s Brent Crude, and Dubai Crude. WTI and Brent Crude are traded as futures, while Dubai Crude is transacted in spot trading.

Crude prices at IFAD are determined by futures trading prices in a way that is similar to a stock exchange. Real-time trading is allowed around the clock, except for two hours per day in which it is closed.

The first shipment of crude from Murban futures trading will be delivered two months later in June.