ADNOC’s Oil Export Sales Pick Up Pace Despite Iranian Blockade
Despite the ongoing Iranian blockade of the Strait of Hormuz, UAE state oil company ADNOC has announced a tender for 14 million barrels of oil, including some that must be delivered from the “bottled-up” side of the strait. This is the second such tender in two weeks and is seen as a sign that ADNOC is optimistic about the prospects for peace or confident in its ability to slip cargoes quietly through the waterway.
The latest tender, which was announced this week, offers crude from three Arabian Gulf fields: Upper Zakum, Das, and Umm Lulu. These fields load in the Gulf and are normally exported via the Strait of Hormuz. In past tenders, 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.
Ship-to-Ship Transfers: A New Normal?
The deliveries from laden vessels confirm past reporting that ADNCO’s oil is arriving on the eastern side of the strait by tanker. Some market participants have quietly intimated for some time that ADNOC has been using its own Very Large Crude Carriers (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. Despite this incident, ADNOC appears to be continuing with its program to send oil through the strait.
OPEC Export Volumes Still Low
While ADNOC may be moving some cargoes through the waterway, 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.
In this challenging environment, ADNOC‘s decision to continue with its oil export sales is seen as a sign of confidence and optimism about the prospects for peace. However, the situation remains fluid, and market participants will be closely watching developments in the Strait of Hormuz to see if ADNOC’s strategy pays off.
Original Article: Despite Iranian Blockade, ADNOC Picks Up Pace of Oil Export Sales — The Maritime Executive