ADNOC Scoops Up Iraqi Crude at $25 Per Barrel Discount

ADNOC has been taking advantage of steeply discounted Iraqi crude offers, agreeing to buy roughly 32 million barrels for August and 40 million for September, Reuters sources reported. The reported discounts on the August allotment were in the range of $24.90 to $27 per barrel, while September volumes included tranches discounted by about $18 and $25 per barrel.

Practical liftings have fallen short of allocations because Iraq has faced export bottlenecks. ADNOC was allocated 32 million barrels for August but reportedly lifted only about 20 million; it has taken another 14 million barrels so far in September. Kpler data cited in the reporting show Iraq’s exports recovered from about 1.374 million barrels per day (bpd) in July to 2.354 million bpd in August, with September flows running near 2 million bpd.

Part of the supply stress reflects Iraq’s limited tanker fleet and reliance on Persian Gulf loadings, although Iran recently allowed some Iraqi tankers to transit the Strait of Hormuz after Baghdad requested access. By contrast, the UAE has more robust logistics, including a pipeline to Fujairah that lets cargoes load outside Hormuz; UAE crude exports rose from about 2.871 million bpd in July to roughly 3.236 million bpd so far in September.

According to Reuters sources cited by OilPrice.com, ADNOC intends to process much of the Iraqi crude at its Ruwais refinery and sell a higher proportion of UAE crude into international markets. Other energy companies — including PetroChina, Zhenhua Oil, TotalEnergies, Vitol, Trafigura, Mercuria and Cathay Petroleum — have also bought Iraqi barrels offered at steep discounts. Separately, Iraq has set an ambition to lift output from about 4 million bpd before the war to between 8 million and 10 million bpd within six years.