Abu Dhabi National Oil Co.'s shipping arm spent $1.3 billion on new tankers, lifting its Very Large Crude Carrier fleet to 14 ships from eight and adding five vessels for fuels like propane. The purchase comes as Adnoc moves more crude through the Strait of Hormuz than any other producer after leaving OPEC, while a pipeline that skirts the strait covers less than half of the UAE's oil exports.
Abu Dhabi National Oil Co.'s shipping arm spent $1.3 billion on new tankers, nearly doubling its fleet of the largest crude carriers as the UAE oil giant moves more of its own crude exports through the contested Strait of Hormuz.
VLCC count jumps to 14
Adnoc L&S bought six Very Large Crude Carriers, ships that each carry about 2 million barrels of crude oil, lifting its count to 14 from eight. The company also bought five vessels that carry fuels like propane, picking up three Very Large Gas Carriers on the secondary market and ordering two more as newbuilds due in the fourth quarter. Adnoc L&S will take delivery of the secondary-market ships this quarter.
More crude, less OPEC
While much of the transit through Hormuz has been choked off by the war between the US and Iran, Adnoc has moved more crude through the strait than any other producer over the past two months. The company also confirmed it left OPEC, a decision that will likely lift its output — and its need for ships — over the longer term. Throughout the war, Adnoc has used its own vessels and chartered tankers to shuttle crude and refined products out of the Gulf, often under cover of darkness and with military escort, before the barrels are transferred to other ships.
Pipeline capacity falls short
A cross-country pipeline lets the UAE route oil around Hormuz, but it carries less than half of the roughly 3.6 million barrels a day of crude the UAE has exported over the past two months, leaving tanker capacity as the deciding factor. Saudi Arabia, which also owns a large tanker fleet, instead relies on its own pipeline to pump crude from Gulf fields to the Red Sea for export.
The purchases also reflect a tighter tanker market. A South Korean tycoon, backed by a unit of the world's biggest container shipping company, has snapped up dozens of supertankers this year, a buying spree that was already pushing tanker earnings higher before the Iran war began. A senior industry executive said earlier this year that companies have been scrambling for tonnage to secure vessels for themselves.
Source: Rigzone
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