ADNOC Snaps Up Discounted Iraqi Crude Amid Export Constraints

ADNOC has secured tens of millions of barrels of Iraqi crude at discounted prices, helping to free up its own supply for export. The UAE producer agreed to buy 32 million barrels of Iraqi crude for August at discounts ranging from $24.90 to $27 per barrel and another 40 million barrels for September, according to sources cited by Reuters.

September's purchases included 10 million barrels discounted by $18 and another 30 million barrels discounted by $25. However, actual liftings have been smaller due to export constraints in Iraq, which has struggled to get crude out. ADNOC was allocated 32 million barrels for August but lifted about 20 million barrels after export constraints limited availability.

Other buyers such as PetroChina, Zhenhua Oil, TotalEnergies, Vitol, Trafigura, Mercuria, and Cathay Petroleum have also purchased Iraqi barrels at steep discounts. ADNOC plans to run much of the Iraqi crude through its Ruwais refinery and sell more UAE crude into the international market.

The constraints on Iraq's exports are creating extraordinary discounts, with Iraq wanting to raise production from 4 million bpd before the war to between 8-10 million bpd within six years.