ADNOC in the UAE buys Iraqi oil at discounts of up to $27 per barrel
Emirati oil company ADNOC is purchasing tens of millions of barrels of Iraqi oil at significant discounts and plans to refine part of the crude at its refinery in Ruwais, UAE. This was reported by OilPrice, citing Reuters sources.
Purchase volumes and discounts
According to Reuters sources, ADNOC agreed to buy 32 million barrels of Iraqi oil in August at discounts ranging from $24.90 to $27 per barrel. For September, the company agreed to purchase another 40 million barrels: 10 million barrels at an $18 discount and 30 million barrels at a $25 discount per barrel.
Actual shipment volumes were lower than agreed due to Iraq's difficulties in exporting oil. In August, ADNOC lifted about 20 million barrels out of the allocated 32 million, while in September, as of the time of publication, it lifted another 14 million barrels.
Iraq's export restrictions
According to Kpler estimates, Iraq exported 1.374 million barrels per day in July, while in August the figure rose to 2.354 million barrels per day. In September, the country's exports amounted to approximately 2 million barrels per day.
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Last month, Iran allowed certain Iraqi tankers to pass through the Strait of Hormuz following requests from Baghdad. Iraq has limited maritime transport capacity of its own and has traditionally transported most of its oil through the Persian Gulf, making its supplies vulnerable to shipping disruptions.
UAE's logistical advantage
The UAE can transport its own oil by pipeline to Fujairah, where tankers are loaded outside the Strait of Hormuz. UAE oil exports rose from 2.871 million barrels per day in July to 3.236 million barrels per day in September, as of the time of publication.
According to Reuters, ADNOC intends to refine a significant portion of Iraqi oil at the Ruwais plant, freeing up larger volumes of UAE oil for the international market. Iraqi oil at substantial discounts was also purchased by PetroChina, Zhenhua Oil, TotalEnergies, Vitol, Trafigura, Mercuria, and Cathay Petroleum.
