Abu Dhabi National Oil Co. has bought millions of barrels of discounted crude from Iraq's state oil firm, according to three people familiar with the matter, as the UAE producer expands its trading role amid supply disruptions from the Iran war. ADNOC was the biggest lifter of Iraqi crude in August and September, helping boost Iraqi exports that had been severely curtailed in the earlier months of the war.
ADNOC becomes Iraq's top crude buyer
ADNOC's trading arm was the biggest lifter of Iraqi crude in August and September, according to two Iraqi energy sources. The purchases helped boost Iraqi exports that had been severely curtailed in the earlier months of the war. As a result, the UAE oil giant has expanded its role as a trader of discounted Iraqi barrels.
Deep discounts on August and September barrels
One of the Iraqi sources said ADNOC agreed to buy 32 million Iraqi barrels in August at discounts ranging from $24.90 to $27 a barrel, plus a further 40 million barrels in September. Of the September volume, 10 million barrels carried an $18-a-barrel discount and 30 million barrels carried a $25 discount, the source said.
A second Iraqi source gave a different August figure: Iraq's state oil marketing organisation SOMO allocated ADNOC 32 million barrels that month, but the UAE giant lifted only 20 million barrels because of export constraints and Basra Oil Company's inability to secure sufficient crude. The same source said ADNOC has lifted 14 million Iraqi barrels so far in September. A third source separately said ADNOC bought about 20 million barrels from SOMO in tenders at a discount of between $25 and $27 a barrel for September-through-October lifting.
Other buyers line up for discounted cargoes
ADNOC is not alone in chasing cheap Iraqi crude. Trade sources previously told Reuters that SOMO's steep discounts on August-loading cargoes also drew in Chinese state majors PetroChina and Zhenhua Oil, along with TotalEnergies, Vitol, Trafigura, Mercuria and Cathay Petroleum.
Source: Commodities & Futures News
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