/Reuters Agency
To evade Iranian attacks, vessels linked to the United Arab Emirates and various buyers have recently transited through the Strait of Hormuz with their tracking systems turned off. According to industry sources and navigation data, this maneuver seeks to release crude oil that remains blocked in the Persian Gulf due to the conflict in the Middle East.
Although these volumes represent only a fraction of the UAE’s usual exports before the war of the United States and Israel against Iran, they demonstrate the risks that both the producer and the buyers are willing to take to free up crude sales.
Conversely, other Persian Gulf producers—Iraq, Kuwait, and Qatar—have chosen to suspend their sales or drastically cut prices to attract reluctant buyers, while Saudi Arabia is only making shipments via the Red Sea.
In April, the Abu Dhabi National Oil Company (Adnoc) managed to export at least 4 million barrels of its Upper Zakum crude and 2 million barrels of Das crude on four tankers from terminals within the Persian Gulf. This is indicated by three separate sources, vessel tracking data from Kpler, and an analysis of satellite data from SynMax.
The cargoes were discharged via ship-to-ship (STS) transfer to another vessel that subsequently transported the oil to a refinery in Southeast Asia, discharged at storage facilities in Oman, or sailed directly to refineries in South Korea.
The above information comes from the three mentioned sources, one with direct knowledge of the matter and two familiar with Adnoc’s operations, as well as data provided by Kpler and SynMax.
Tehran responded to the attacks by the United States and Israel, which began on February 28, by effectively closing the Strait of Hormuz to any exports other than its own, thereby holding back a fifth of the global oil and gas supply.
The impediment, combined with a US blockade that has paralyzed Iranian exports in recent weeks, has pushed global crude prices above $100 per barrel.
Since the start of the war, Adnoc has had to reduce its exports by more than one million barrels per day (bpd) compared to the 3.1 million bpd it shipped last year, according to Kpler data.
The majority of its exports consist of its Murban grade, which is transported via pipelines from onshore fields to Fujairah.
Adnoc’s cargoes run the risk of being attacked by Iran. This was recently evidenced by the UAE’s accusation that Iran used drones to attack an empty state-owned tanker, the Barakah, while it was transiting through the Strait of Hormuz.
The vessels sail with their Automatic Identification System (AIS) transponders turned off, which reduces the chances of being detected by Iranian forces.
This tactic is commonly used by Iran itself to evade US sanctions on its crude oil exports.
This also makes it difficult to track Adnoc’s total export volumes through industry navigation data, meaning the figures shipped from the Gulf in April could be higher.
Even so, Kpler data showed that the VLCC Hafeet loaded 2 million barrels of Upper Zakum crude inside the Gulf on April 7 and exited the Strait on April 15.
Once outside the Strait, the cargo was transferred between April 17 and 18 to the Greek-flagged VLCC Olympic Luck and sent to the Pengerang refinery in Malaysia, a joint venture between Malaysian state oil company Petronas and Saudi Aramco, according to Kpler data and SynMax analysis.
The Hafeet is managed by Adnoc’s Logistics & Services unit, which declined to comment. Greek company Olympic Shipping & Management, manager of the Olympic Luck, and Petronas did not respond to requests for information.
Splitting the oil cargo through STS transfers allows Adnoc to sell smaller lots and free up VLCC tankers to quickly return to the interior of the Persian Gulf and reload.
One of the split Upper Zakum cargoes sailed to a refinery in Northeast Asia and sold at a record premium of $20 per barrel over Adnoc’s official selling price, according to the source with direct knowledge of the matter.
As for Abu Dhabi’s Das crude, the VLCC Aliakmon I loaded 2 million barrels of this grade on April 27 and exited the Strait on May 2, discharging at the Ras Markaz storage terminal in Oman on May 3, according to Kpler data.
Kpler and SynMax also detected two Suezmax-class tankers – the Odessa and the Zouzou N. – each carrying 1 million barrels of Upper Zakum destined for South Korea after exiting the Strait.
The three tankers are managed by Greek company Dynacom Tankers Management. It is unclear who chartered the Dynacom vessels and the company did not respond to a request for comment.
Adnoc intends to continue selling oil from inside the Strait; in late April, it notified some customers that they could load Das and Upper Zakum crude starting in May via STS transfers at ports outside the Gulf, including Fujairah and Sohar (Oman).
The company is in talks with Asian refineries to sell Das and Upper Zakum cargoes with loading scheduled for May, according to the source with direct knowledge of Adnoc’s plans and a source from an Indian refinery, who requested anonymity as they were not authorized to speak to the press.
