ADNOC (Abu Dhabi National Oil Company) has recently begun purchasing 72 million barrels of Iraqi crude oil at significant discounts. These discounts have arisen due to Iraq's export restrictions and the need to transport oil through routes other than the Strait of Hormuz. The company has purchased 32 million barrels of Iraqi crude oil for August with discounts ranging from $24.90 to $27 per barrel, as well as 40 million barrels for September.
Details of Oil Purchase and Transfer
According to reports, the September purchases include 10 million barrels at an $18 discount and 30 million barrels at a $25 discount. However, the actual volume of loaded oil has been less than this amount, as Iraq is facing difficulties in exporting oil. ADNOC was initially allocated 32 million barrels for August, but has only loaded 20 million barrels due to export restrictions. So far in September, the company has loaded another 14 million barrels.
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Situation of Iraqi Exports and Its Implications
Iraqi oil exports reached 1.374 million barrels per day in July and increased to 2.354 million barrels per day in August. Currently, September exports are estimated at around 2 million barrels per day. Due to a lack of transport capacity, Iraq has historically transported most of its crude oil through the Persian Gulf, which poses a high risk of disruptions. These issues have led to significant discounts for buyers like ADNOC.
With better infrastructure and the ability to transport its crude oil through pipelines to Fujairah, which is outside the Strait of Hormuz, ADNOC has been able to increase its export flow. UAE crude oil exports increased from 2.871 million barrels per day in July to 3.236 million barrels per day in September. A significant portion of Iraqi crude oil is planned to be processed at the Ruwais refinery in the UAE, and then more crude oil will be supplied to international markets.
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