ADNOC Scoops Up Discounted Iraqi Crude, Avoids Strait of Hormuz

UAE-based ADNOC is taking advantage of discounted Iraqi crude oil, buying tens of millions of barrels at significant discounts. The company has agreed to purchase 32 million barrels for August and another 40 million barrels for September, with prices ranging from $24.90 to $27 per barrel. These discounts are the result of Iraq's struggling to export its own crude due to logistical constraints.

The UAE producer is processing much of this discounted oil at home through its Ruwais refinery, freeing up more of its own barrels for export. ADNOC has better logistics than Iraq, allowing it to move its crude through a pipeline to Fujairah, where tankers load outside the Strait of Hormuz.

Other buyers have also spotted the bargain, including PetroChina, Zhenhua Oil, TotalEnergies, Vitol, Trafigura, Mercuria, and Cathay Petroleum. Iraq's goal is to raise its production from 4 million barrels per day (bpd) before the war to between 8 million and 10 million bpd within six years.