The price of Murban Crude, the flagship grade of the United Arab Emirates, surged to a four-month high this week, amid reports that the UAE’s national oil company ADNOC will reduce its crude allocations for August and September for some customers.
ADNOC plans to cut by about 5% the supply it is offering in spot tenders to Asian buyers this month and next, anonymous sources with knowledge of the matter told Bloomberg on Wednesday.
The lower crude oil supply to Asia in the coming weeks will be the result of maintenance on some of ADNOC’s onshore fields in Abu Dhabi, a separate source told the publication.
Murban Crude this week trades at a nearly $7 per barrel premium over Brent crude futures, at $97.75 a barrel. According to data compiled by Bloomberg, that’s the highest premium of Murban to Brent since the beginning of April, when supply constraints from the Middle East hit their peak with the closed Strait of Hormuz.
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The Murban grade traded at a discount to Brent Crude between the end of April and early August, with a brief one-day spike into premium on July 23, when the U.S. was conducting daily strikes on targets in Iran after the ‘deal to make a deal’ collapsed.
Since June, ADNOC has sold an estimated more than 100 million barrels in spot tenders, as the Gulf producer that has just left OPEC pushes to sell increased crude volumes to international markets.
The UAE has managed to boost its oil exports to pre-crisis levels as early as June, as it has kept pushing crude through the Strait of Hormuz and outside it.
The UAE, which left OPEC on May 1, has found workarounds to the blockage at the Strait of Hormuz.
It has been shuttling crude through the chokepoint to load it on larger vessels outside the Strait, maximizing the use of its onshore pipeline to ship crude from the west to the east of the country, bypassing Hormuz, and shipping tankers through the Strait in dark mode.
By Tsvetana Paraskova for Oilprice.com
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