UAE oil exports reached 2.6 mn bbl / d in May

The UAE is showing it can keep crude moving even with the Strait of Hormuz under strain, and despite its second pipeline bypassing the strait still being under construction. Bloomberg ’s tanker data indicates exports held at about 2.6 mn bbl / d in May — not too far from its 3.1 mn bbl / d exports last year — and that’s thanks to a series of moves from Adnoc ranging from spot sales and flexible delivery options to braving through the strait in the dark.

Adnoc sold at least 14 mn bbl of crude to Asian buyers through a spot tender, the business information service says, citing traders in the know. The cargoes — comprising Upper Zakum, Umm Lulu, and Das Blend crude — were placed with refiners across China, Japan, South Korea, and India, reportedly at premiums a few greenbacks above the Dubai benchmark; a sign that buyers are willing to pay up for crude that can be delivered despite logistical and security complications.

That pricing strength has also shown up in Adnoc’s official selling prices. The company raised its May OSP to USD 110 / bbl from USD 69 in April as security and logistics costs continue to be priced into Gulf crude flows.

The sale follows the June-September loading tender we reported on last week, which allowed buyers to bid for up to 2 mn bbl per cargo on a cost-and-freight basis. The scale of the offering suggested Adnoc was prepared to market substantial volumes despite ongoing disruption to Gulf shipping routes.

More barrels are on the way — and delivery is looking very different. Adnoc launched a second tender offering the same crude grades for June-August loading, closing on 11 June Reuters reports. Buyers can bid for up to 2 mn bbl per cargo, with crude available from Fujairah storage, Zirku Island, Das Island, or via ship-to-ship transfers between Fujairah and Sohar. That builds on earlier flexibility offered to term customers, who were told May cargoes could be lifted through alternative delivery points on a case-by-case basis.