Abu Dhabi National Oil Co. (ADNOC) is set to reduce the amount of crude oil supplied to its Asian customers in August and September. This move, reported by sources familiar with the matter, is already contributing to an increase in the price of Murban, ADNOC's flagship oil grade. The reduction specifically targets shipments sold on the spot market, amounting to approximately 5% of volumes. This adjustment applies to over-the-counter transactions, meaning physical cargoes purchased through ICE Futures Abu Dhabi are not affected.
The reduction in Murban crude supplies is primarily attributed to scheduled maintenance at Abu Dhabi's onshore oil fields, according to one person with knowledge of the situation. This tightening of supply has had an immediate impact on the market, with Murban crude's premium over Brent futures rising to nearly $7 a barrel this week. This is a significant turnaround, as Murban was trading at a discount to Brent earlier in August.
While an ADNOC spokesperson declined to comment on the matter, market observers note that these allocation adjustments are a common tool used by major Gulf producers to manage prompt availability in the spot market. The 5% reduction falls within typical operational tolerance limits, which allow for variations due to technical constraints. This shift forces refiners into the spot market, thus supporting regional benchmarks relative to Brent and Dubai comparators before impacting the flat price.
