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Why Is This Little-Known Element Up Over 300%

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Element ‘’V’’, better known as…

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UAE Buys First U.S. Oil To Replace Qatar Supply

Tanker

The United Arab Emirates (UAE) has bought a cargo of condensate from the Eagle Ford in what would be its first U.S. oil purchase, as the Middle Eastern producer is trying to replace condensate supply from Qatar after it severed ties with the tiny gas-rich state in one of the worst diplomatic rows in the region in recent years.  

Abu Dhabi National Oil Company (ADNOC) has acquired a condensate cargo from the Eagle Ford in a tender with delivery set for September, Reuters reported on Wednesday, citing two sources familiar with the issue.

There was no immediate information about the volume of the U.S. condensate purchase, but according to one of Reuters’ sources, the cargo would arrive in the UAE in a supertanker capable of shipping up to 2 million barrels of oil.

At the beginning of July—a month after several Arab states led by the UAE and Saudi Arabia cut ties with Qatar—Qatar Petroleum’s CEO Saad Sherida Al Kaabi said that ADNOC had declared force majeure to halt shipments of Qatari condensate, as quoted by Bloomberg. Qatar Petroleum said then it would resort to “legal actions” over what it said was an illegally imposed force majeure.

ADNOC had communicated to Qatar Petroleum that there was no force majeure on Qatari fuel cargoes, according to an ADNOC official who communicated via text message to Bloomberg in early July.

Related: Daily OPEC Oil Prices Now Public For The First Time Ever

According to trade sources briefed by Reuters, ADNOC has limited choice in picking suppliers of condensate to replace Qatari volumes, because supplies in Asia are tightened due to high demand in South Korea and Indonesia.

According to trade sources, ADNOC was receiving 1-1.5 million barrels of condensate from Qatar each month under a term agreement with Qatar Petroleum.

ADNOC had tried to replace Qatari supplies with Saudi Arabia’s Khuff condensate, but production of Khuff is small and typically intended for domestic consumption, trade sources told Reuters. 

By Tsvetana Paraskova for Oilprice.com

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