ADNOC issues seventh crude tender despite shipping risks

Abu Dhabi National Oil Company has issued its seventh crude tender since the beginning of June, expecting to sell millions of barrels of crude between August and October, offering supply from both inside and outside the Persian Gulf region. Buyers have until the middle of next week to submit their offers.

The latest tender arrives amid renewed threats to supply routes. Risks include the potential blockage of the Strait of Hormuz and new attacks on shipping in the Red Sea by the Iran-aligned Houthis in Yemen. ADNOC is inviting interested buyers to bid despite these conditions. The firm is estimated to have sold more than 74 million barrels of crude to buyers in the previous tenders since early June by running a kind of shuttle service to ship crude onto tankers outside the Strait of Hormuz.

The UAE developed a unique logistical strategy to move its oil past blockades. Before the renewed hostilities in the Middle East, the country was estimated to have produced 4.1 million barrels per day of crude oil in June, its highest output ever. This level is a sharp increase from the 3.3 million bpd recorded in May. The surge occurred after the UAE left OPEC, a move that took effect on May 1, allowing officials to move oil out of the Middle East even as the Strait was mostly blockaded for the first half of June.

The UAE has sought to adapt to these shipping challenges by sneaking tankers in “dark mode” through the Strait and increasingly offering to sell many of its crude grades for loading at Fujairah in the UAE and Sohar in Oman, both located outside the Strait. The latest offering includes cargo loadings from specific ports, such as Zirku and Das Island inside the Persian Gulf. ADNOC is also offering the port of Fujairah outside the Gulf, as well as the option of ship-to-ship transfers offshore Fujairah or in Malaysian waters.

In the seventh tender, the Abu Dhabi oil producer will automatically reject any bid from buyers at a discounted differential, according to Reuters sources. [GooglePreferredSource]

The latest tender shows that ADNOC is not slowing down its sales efforts. Despite the risks in the Red Sea and the Gulf, the company is actively courting buyers for the August to October loading window. By offering oil through multiple channels, from Persian Gulf ports to Asian waters, ADNOC is securing its position in the global market.