Despite Iranian Blockade, ADNOC Picks Up Pace of Oil Export Sales
UAE state oil company ADNOC is selling more of its crude than might be expected given the Iranian blockade of the Strait of Hormuz. This week, it announced a tender for 14 million barrels of oil, including some that has to be delivered from the "bottled-up" side of the strait, according to Bloomberg and Reuters. It is the second such tender in two weeks, and is seen by many as a sign that ADNOC is optimistic about the prospects for peace - or confident in its ability to slip cargoes quietly through the waterway and out to market, even in the absence of a U.S.-Iran ceasefire deal.
Last week's tender offered crude from three Arabian Gulf fields, Upper Zakum, Das and Umm Lulu, all of which load in the Gulf and are normally exported via the Strait of Hormuz.
In past tenders in April, ADNOC reportedly told bidders that it would be able to deliver the crude via ship-to-ship transfer off the coast of Fujairah, in the Gulf of Oman. The deliveries from laden vessels confirm past reporting that ADNOC's oil is arriving on the eastern side of the strait by tanker, as some market participants have quietly intimated for some time.
Reuters first reported on an ADNOC program to send oil through the strait back in early May; the news agency's sources indicated that the oil major has used its own VLCCs to load in the Arabian Gulf and discharge via STS transfer in the Gulf of Oman, braving the risk of Iranian attack in the process. One of these tankers, the Barakah, was hit by two drones and damaged off Oman on May 4. The ship had just discharged via STS transfer and was in ballast, and no injuries were reported.
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ADNOC may be moving some cargoes through the waterway, but overall export volumes out of the Gulf region are still far below normal. In May, OPEC export volumes hit a 40-year low. Total vessel crossings (including dry cargo ships) are still little more than a trickle at about eight in total from June 5-7, according to Kpler.
Top image: Lana P / VesselFinder