UAE OIL SHUTTLE: ADNOC Offers To Move Iraqi Crude Through Strait Of Hormuz

The UAE's state-owned Abu Dhabi National Oil Co. Is offering to transport Iraqi oil through the Strait of Hormuz using a shuttle system it has employed to move its own crude from the Persian Gulf. Under this method, vessels make short trips through Hormuz, sometimes with transponders switched off, before transferring cargo to other ships outside the Gulf. ADNOC has been among the region's most successful producers at moving oil through the strait amid ongoing tensions with Iran. The company has recently offered spot cargoes of Iraqi crude, including Basrah oil, to Asian buyers, with Indian refiners among those receiving offers.

Vitol Group and TotalEnergies have traditionally been the main carriers of Iraqi crude. Iraq's state oil marketer SOMO reported exports have climbed to around 2 million barrels per day this month, up from an earlier estimate of 1.5 million to 1.7 million barrels per day. The increased use of shuttling has emerged as a key method for moving oil from the Gulf as negotiations over reopening the strait remain uncertain and vessel attacks continue. Several ADNOC tankers were attacked while transiting Hormuz recently.

Iraq has offered steep discounts to companies willing to transport its oil through the strait. SOMO has cut prices by as much as $30 per barrel below benchmark levels for some cargoes this month, while discounts on Basrah Medium crude have ranged between $25 and $27 per barrel. ADNOC operates its own fleet and has also hired ships from Sinokor Group, while Iraq has largely continued selling crude on a loading basis and relying on other companies to handle transportation.