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Oil

UAE’s ADNOC to make deep crude oil term supply cut in Sept for some Asian buyers

Published: Updated:

Abu Dhabi National Oil Company (ADNOC) will reduce the volume of crude oil it supplies to Asian term buyers by 15% in September, according to six sources with direct knowledge of the matter.

The cut was much deeper compared with a reduction of 5% in term volume allocation for crude oil cargoes loading in August, three of the sources said. ADNOC did not provide a reason for the deeper cuts, the sources said.

The move came as a surprise for some market participants ahead of an upcoming OPEC+ meeting on July 1. It was not immediately clear why ADNOC was making a deeper supply cut for crude oil loading in September for its term contract customers.

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The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to gradually unwind last year’s record oil output curbs.

Sources told Reuters last Tuesday that OPEC+ was discussing a further easing of oil output cuts from August as oil prices rise on demand recovery, but no decision had been taken yet on the exact volume to bring back to the market.

ADNOC did not immediately respond to an emailed request seeking comment.