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Despite expectations that the OPEC+ group could raise overall supply in the coming months, the Abu Dhabi National Oil Company (ADNOC) of the United Arab Emirates (UAE) plans to significantly reduce term supplies of its crude oil grades for loading in September.
ADNOC has already informed buyers it would be cutting the September-loading term supply of its crude by 15 percent, Argus reported on Monday.
Separately, four sources with direct knowledge of ADNOC’s plans told Reuters that the UAE’s state-held oil giant would cut crude oil supply to its term customers in Asia by 15 percent for September.
The reported reduction for September would be higher than the 5-percent cut in crude term supply expected to apply to the August loadings of ADNOC’s key crude oil grades.
All the crude grades in from the UAE—including Murban, Umm Lulu, Das Blend, and Upper Zakum—are set to see term supply cut by 15 percent for cargoes loading in September, Argus reports.
ADNOC has also said in estimates that its export availability for July and August would be 1.07 million bpd and 1.105 million bpd, respectively, according to Argus. Between September 2021 and June 2022, the UAE will be raising its crude export availability to 1.13 million bpd in each of those months, Argus notes.
The reported cut from the UAE comes days before OPEC+ meets later this week to decide how to proceed with the production cuts as of August 1.
The OPEC+ alliance is widely expected to decide on July 1 to further ease the collective production cuts, but the additional supply from August will likely still be less than the supply deficit on the market, analysts and traders told Bloomberg in a survey last week.
Thirteen out of 15 analysts Bloomberg surveyed expect OPEC+ to add more barrels, but their average forecast is for additional supply of around 510,000 bpd from August. This is just a quarter of the expected supply deficit in August, according to estimates from OPEC+ itself, Bloomberg notes.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.