The state oil company of Abu Dhabi, part of the United Arab Emirates, told customers that it will reduce shipments of crude oil from this month, in line with OPEC+’s surprise decision to tighten supplies.
(Bloomberg) — The state oil company of Abu Dhabi, part of the United Arab Emirates, told customers that it will reduce shipments of crude oil from this month, in line with OPEC+’s surprise decision to tighten supplies.
Abu Dhabu National Oil Co., also known as Adnoc, will cut the volumes by 5% for all of its cargoes being shipped from May, according to people who were informed by the producer. That’s within the lower range of the operational tolerance rule for long-term contracts, under which the company has the ability to supply plus or minus 5% of monthly volumes.
Adnoc didn’t immediately comment on the matter.
It’s the first sign yet that a member of the OPEC+ coalition is moving toward implementing the group’s production cuts of around 1.6 million barrels a day by July. Saudi Arabia in April led the cartel by pledging its own 500,000 barrel-a-day supply reduction, with fellow members including Kuwait, UAE and Algeria following suit.
The Organization of the Petroleum Exporting Countries and its allies are currently proceeding with preparations for an in-person meeting at its Vienna headquarters next month. UAE is the third-biggest producer within OPEC.
Middle Eastern producers including Adnoc have operational tolerance rules as part of their long-term contracts with customers which enables them to fine-tune supplies to the exact capacity of different oil tankers. But the tolerances can also be used to reduce supplies unilaterally.
–With assistance from Sarah Chen.
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