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By Florence Tan, Chen Aizhu and Siyi Liu
- War disruption drives spot sales, more flexible terms – traders
- ADNOC has sold at least 94 mln barrels in spot market since June
- UAE has gained Asia market share among Middle East producers
- ADNOC expanding fleet, using shuttle system to ship oil
SINGAPORE, Aug 13 (Reuters) – The gloves are off for ADNOC.
State-owned Abu Dhabi National Oil Co. has become more aggressive and nimble since the Iran war disrupted exports and as the United Arab Emirates looks to maximise its resources after exiting OPEC in May, according to numerous trade sources.
In recent months, ADNOC has begun selling spot cargoes through tenders, tapping new customers, offering unprecedented flexibility in its terms and conditions and even dealing with the trading houses it typically shunned, traders and other industry insiders say.
It has also deployed a shuttle system to move its crude across the Strait of Hormuz, where traffic has been severely curtailed by the war and its vessels have faced attack, and is expanding its shipping fleet.
If ADNOC’s shift proves to be more than a wartime workaround, it could be one of the biggest changes in Gulf oil marketing in decades, reshaping flows from the Middle East to top consumer Asia, with implications for Asian refiners and ADNOC rivals such as Saudi Aramco, Kuwait Petroleum Corp and Iraq’s SOMO.
“ADNOC feels totally liberated by leaving OPEC,” as it no longer faces constraints on production and pricing, said veteran former oil trader and director at consultancy Surrey Clean Energy, Adi Imsirovic.
“Their hands are finally untied and you can see what they’re doing with their tenders and pricing options.”
ADNOC’s approach is showing results: the UAE is gaining Asian market share, accounting for 32% and 27% of Middle Eastern shipments to the region in June and July, respectively, according to Kpler data. Last year, the UAE accounted for 20% of Middle Eastern oil exports to Asia.
OPEC EXIT DRIVES OUTPUT
Under Saudi-dominated OPEC, the UAE’s recent production target was around 3.5 million barrels per day but output is expected to hit 5.2 million bpd in 2027, according to the International Energy Agency.
ADNOC says its strategy is unchanged.
“We’re focused on disciplined smart growth in the UAE and internationally, ensuring reliable supply and building long-term partnerships that create value for our customers, the UAE and our shareholders,” a spokesperson said.
The boldness of ADNOC’s ambition was underscored in April when it set up a shuttle system to ferry cargoes across the Strait of Hormuz for ship-to-ship transfer to buyers, enabling it to maintain spot sales.
That has come at a cost. ADNOC said last Friday that 15 of its vessels had been attacked while transiting the Strait, with one crew member dead and 20 injured. The UAE said another ADNOC vessel was attacked on Saturday.
ADNOC said it was working closely with relevant authorities and taking all necessary measures to protect its people, assets and operations, while meeting customer requirements as much as possible.
SPOT TENDERS AND SHIPS
For decades, Gulf producers sold crude directly to end-users through long-term contracts, using official selling prices (OSPs) set by state producers, with refiners handling shipping. For the most part, they kept out of the spot market.
The Iran war has upended that: refiners that buy the oil have been unable to find tankers or unwilling to pay soaring charter rates, while OSPs in June and part of July became far higher than spot prices when a glut of crude hit the market.
The disruption saw ADNOC begin spot sales and use its shuttle fleet to transfer cargoes to vessels off the UAE’s Fujairah port, Oman’s Sohar, the west coast of India and even distant Malaysia, traders said.
Since June, ADNOC has sold at least 94 million barrels of oil for delivery through October via seven tenders, according to a Reuters tally. Other Gulf producers including Aramco, Kuwait Petroleum and SOMO have followed suit.
To put that volume in perspective, the UAE exported 198 million barrels of crude in the first two months of 2026 – before the war – according to Kpler data, including oil owned by ADNOC’s equity partners.
To help deliver its energy, ADNOC is expanding its fleet, with a company arm recently buying 11 ships for $1.3 billion, including six Very Large Crude Carriers capable of carrying 2 million barrels each.
FLEXIBLE TERMS, WIDENING OUTREACH
ADNOC has also shown flexibility to customers, three people with knowledge of the matter said, allowing sales through private negotiations in addition to tenders, and changes to terms and conditions of spot sales.
For example, where once it sold oil on a free-on-board (FOB) basis, ADNOC recently agreed to deliver at ship-to-ship transfer points as well as other ports, traders said.
On July 31, ADNOC said it will change the benchmark for monthly OSPs to prompt-month Platts Dubai pricing from Murban crude futures from November 1, aligning them more closely with the month of loading.
And while Gulf producers long refrained from selling to trading firms in favour of end-users, ADNOC recently sold cargoes to buyers including Mercuria, Vitol and Cathay Petroleum, none of which have term deals with it, sources said. Iraq’s SOMO followed with similar sales.
“While we do not comment on specific customers or commercial arrangements, ADNOC continues to see a surge in interest in our crude grades, especially from refiners and lifters that prefer prompt market pricing given current market volatility,” the ADNOC spokesperson said.
ADNOC’s crude marketing team recently visited refiners in Japan, Singapore and Azerbaijan, urging them to participate in its tenders, sources said.
SHIFTING LEVERAGE
To be sure, the changes cut both ways.
Three longtime Asian ADNOC customers told Reuters that they expect better, more flexible terms when they negotiate for 2027 supply, such as being able to load outside the Strait of Hormuz.
ADNOC historically held the upper hand in setting General Terms and Conditions, known as GTSC, with term buyers, said an executive at a major buyer, declining to be named due to the sensitivity of the matter.
“We’re re-evaluating these terms and will add our conditions, such as in lifting schedules and pricing,” he said.
Reporting by Florence Tan, Chen Aizhu and Siyi Liu; additional reporting by Trixie Yap in Singapore and Yuka Obayashi in Tokyo Editing by Tony Munroe and Saad Sayeed
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