Adnoc in talks to route more offshore crude to traders in 2027

Why Adnoc is talking to traders now

Adnoc is holding informal discussions this month with global trading houses about long-term deals in 2027 that would place more of its offshore oil with intermediaries. People familiar with the talks, who are not authorized to speak publicly, said it is unknown whether any have resulted in deals. The company typically sells directly to refiners, so a greater willingness to use traders marks a shift for its offshore barrels.

The barrels and the bottleneck

The talks revolve around Umm Lulu, Das and Upper Zakum, grades produced from fields off the UAE coast within the Persian Gulf. Exports hit snags earlier this year as the Strait of Hormuz effectively shut amid the US-Iran war. The practice known as shuttling, used by Adnoc and other companies, has since helped return supplies to the market.

Amid months of conflict, companies including Vitol Group, Trafigura Group, Mercuria Energy Group and TotalEnergies SE's trading unit showed they were capable of shipping oil out of the Persian Gulf to markets abroad. That has supported refiners that might otherwise have struggled with the logistics and risks of transiting the contested strait.

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Pricing signals and procurement shifts

In recent months, Adnoc has offered spot barrels, including offshore grades, via a string of rare tenders. At times, those cargoes sold for less than if they had been supplied to term buyers at official selling prices. One Asian refiner already plans to trim term volumes in favor of spot purchases. "Given the complexities of the current global energy environment, Adnoc remains focused on managing evolving market conditions and supporting the reliable delivery of energy to customers worldwide," an Adnoc spokesperson said.

The timeline and the takeaways for investors

Ordinarily, negotiations for 2027 term supply would have wrapped by October 2026. This year, producers from the Middle East, including Saudi Arabia, have taken longer to finalize deals, with disputes over terms, ongoing attacks and buyer risk management needs all in the mix. The bottom line: Adnoc is more open to placing offshore grades with trading houses, has run rare spot tenders that at times cleared below term OSP equivalents, and regional producers have been slower than usual to lock in 2027 term contracts.

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