ADNOC Eyes U.S. Trading Expansion in Strategic Global Push

Abu Dhabi National Oil Company (ADNOC) is poised to establish a trading desk in the United States, marking a significant step in its strategic global expansion. Sources with knowledge of the plan revealed to Reuters that the UAE-backed oil and gas giant is actively seeking senior energy traders to spearhead this initiative.

The move aligns with ADNOC's broader objective to diversify revenue streams beyond its traditional base in the Gulf. Since 2018, ADNOC has been ramping up its trading operations, and this latest endeavor is a continuation of that strategy. The company has yet to make an official statement regarding these plans, and sources indicated that the details are still subject to change.

ADNOC's trading business is bifurcated into two main divisions: ADNOC Trading, which focuses on crude oil, and ADNOC Global Trading, a joint venture with Italy's Eni and Austria's OMV, which handles refined products. This dual-structured approach has been central to ADNOC's efforts to enhance its global market presence.

Earlier reports suggested ADNOC's intentions to establish a trading office in Geneva, with operations commencing in early May. Additionally, the company is exploring the establishment of a representative office in London, further underscoring its commitment to expanding its footprint in key financial hubs.

In tandem with these initiatives, ADNOC is also pursuing opportunities in the liquefied natural gas (LNG) market, particularly in the U.S., which has emerged as the world's leading exporter of LNG. The burgeoning LNG trade offers lucrative prospects as Europe seeks to diversify its energy sources.

This expansion mirrors similar moves by other Middle Eastern oil giants, such as Saudi Aramco, which has set up trading offices in Texas, capitalizing on the U.S. shale boom. The trend among Middle Eastern energy producers to bolster their trading operations has been driven by a need for greater control over the marketing of their resources, especially following the 2014 oil price collapse.

The recent volatility in commodity prices has underscored the profitability of trading operations. While core business revenues have faced pressure from fluctuating oil prices, trading activities have provided a substantial buffer, generating significant profits.

By Julianne Geiger for Oilprice.com

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