ADNOC expands spot crude sales amid Hormuz risks

Abu Dhabi National Oil Company has launched its ninth spot crude tender since the beginning of June, extending an unusually active sales campaign as the company seeks to keep supplies moving despite severe disruption around the Strait of Hormuz.

The latest tender offers Upper Zakum, Umm Lulu and Das crude for loading in October and November. Bids are due by August 24 and will remain valid until August 26. Buyers are being offered several loading and transfer options designed to reduce their exposure to the strategic waterway.

Cargoes can be purchased on a free-on-board basis from Fujairah storage, which is outside the strait, or from Zirku and Das islands inside the Gulf. Buyers can also arrange ship-to-ship transfers in waters between Fujairah and the Omani port of Sohar.

ADNOC has sold more than 100 million barrels of crude to refiners and traders through its previous tenders since June, underscoring the scale of a shift towards spot marketing that would have been unusual for a Gulf state producer only months ago. A shuttle fleet has been used to carry crude from Gulf production centres through Hormuz before transferring cargoes to other tankers in the Gulf of Oman.

The strategy is aimed at preserving exports while commercial shipping remains constrained by the conflict involving Iran and the United States. Tanker traffic through Hormuz has fallen sharply from normal levels, prompting shipowners and charterers to assess security risks, insurance costs and freight rates before committing vessels.

Upper Zakum, Umm Lulu and Das are produced from offshore fields within the Gulf and would normally leave the region through Hormuz. That dependence has made flexible delivery arrangements particularly important to ADNOC and its customers.

The ninth tender follows an eighth sale process launched on August 10, when ADNOC offered the same three grades for October and November loading. That round also allowed buyers to lift crude from Fujairah, Zirku or Das Island and to arrange ship-to-ship transfers. At that stage, the company had already sold at least 94 million barrels through its earlier tenders.

At least 14 million barrels were subsequently sold to Asian refiners through that tender, with cargoes commanding premiums as buyers competed for supplies amid tighter availability. Asian refiners have simultaneously increased purchases from the United States and other producing regions to reduce dependence on crude moving through Hormuz.

ADNOC’s expanding spot programme represents a wider change in Gulf oil marketing. Regional producers historically relied heavily on term contracts with refiners, using official selling prices and leaving buyers to organise shipping. The disruption to tanker movements has encouraged producers to assume a more active role in logistics and offer cargoes through competitive tenders.

The company has also broadened its customer base and provided greater flexibility over pricing, delivery points and shipping arrangements. Its crude has increasingly moved through ship-to-ship transfers outside the Gulf, including transfers near Fujairah and Sohar, while Malaysia has been used in some earlier tenders as another transfer location.

Abu Dhabi’s strategy is supported by infrastructure that gives it an advantage over several neighbouring exporters. The Habshan-Fujairah pipeline allows substantial volumes of crude produced in western Abu Dhabi to reach the Gulf of Oman without passing through Hormuz. Plans to expand bypass capacity could further reduce the country’s exposure to disruptions at the chokepoint.

The transformation has coincided with the UAE’s departure from OPEC in May. ADNOC is expected to raise production sharply as Abu Dhabi seeks to monetise expanded capacity and increase its share of Asian markets. The country’s crude accounted for a larger portion of Middle Eastern shipments to Asia during June and July as ADNOC intensified its sales programme.

Saudi Aramco has also offered some crude to Asian refiners from locations outside Hormuz, reflecting a broader regional effort to develop alternative delivery arrangements. Refiners in China, Japan, South Korea and India have emerged as key buyers of additional Gulf spot barrels while simultaneously securing supplies from the Americas and Africa.