Abu Dhabi National Oil Co’s (ADNOC) trading arm has made significant purchases of June-loading cargoes of Abu Dhabi’s Upper Zakum crude in the spot market, leading to a tightening of Middle East supply, according to trade sources. ADNOC Trading has acquired at least four cargoes of the medium-high sulfur crude from Exxon Mobil Corp, Omani trading firm OQ, Repsol, and Aramco Trading at premiums ranging from approximately $2.20 to $2.30 per barrel above Dubai quotes. This represents an increase of nearly $1 per barrel compared to the previous month.
While ADNOC has refrained from commenting on the matter, other oil firms involved typically do not provide statements on commercial deals. The recent purchases follow ADNOC’s substantial reduction in Upper Zakum crude exports in March, as supply was redirected to the Ruwais refinery, which has undergone an upgrade to process heavier oil into higher quality products. Additionally, ADNOC had previously curtailed the annual supply of Upper Zakum crude to Asian buyers in 2024, in anticipation of the upgraded refinery’s crude requirements.
April’s Upper Zakum exports have remained at around 550,000 barrels per day, similar to the 545,000 bpd observed in March, marking the lowest level since November 2017, as reported by analytics firm Kpler. This decline in supply has constrained the availability of cargoes for the Abu Dhabi grade during S&P Global Platts’ price assessment process for Middle East crude Dubai.
Consequently, there has been an increase in the delivery of Murban crude on the Platts window, with PetroChina and Reliance having sold 10 cargoes of the Abu Dhabi light-sour grade thus far in the current month, according to trade data.