ADNOC Issues Ninth Spot Crude Tender Since June as UAE Routes More Oil Around Hormuz

ADNOC Issues Ninth Spot Crude Tender Since June as UAE Routes More Oil Around Hormuz

Abu Dhabi National Oil Company put out its ninth spot crude tender since the start of June, according to Reuters reporting carried by Baird Maritime. Bids are due by August 24 and stay valid until August 26.

The tender covers Upper Zakum, Umm Lulu and Das crude for October and November loading. ADNOC has sold more than 100 million barrels through these tenders since June, using a shuttle fleet to haul oil out of the Persian Gulf and transfer it onto other tankers in the Gulf of Oman, bypassing the choke point at the Strait of Hormuz.

Buyers get options. They can take delivery free-on-board at Fujairah Storage, Zirku or Das Island, or arrange ship-to-ship transfers in the Fujairah-Sohar range, both outside the strait itself, according to IndexBox's reporting on the prior tender.

The UAE exited OPEC on May 1, and vessel-tracking data compiled by Bloomberg showed the UAE moved more crude through the Strait of Hormuz in June and July than any other Gulf producer, according to IndexBox. The country's June output hit 4.1 million barrels a day, its highest ever recorded.

The war behind the workaround

None of this is happening in a vacuum. The US and Israel have been at war with Iran since February 28, and the Strait of Hormuz, which normally carries about a fifth of global oil consumption, has been effectively disrupted since then.

Brent crude futures for October delivery rose $1.20 to $92.82 a barrel by mid-morning Thursday, and WTI added 92 cents to $86.75, according to the Epoch Times. Both benchmarks hit their highest levels since late July, marking a fifth straight session of gains after settling Wednesday at their best levels since July 24.

Ship traffic tells the story. Kpler, a ship-tracking firm, counted nine commodity vessels passing through Hormuz on August 19, unchanged from the day before, while traffic through the Bab el-Mandeb Strait fell to 27 vessels from 32, per the Epoch Times. Kpler noted some vessels may not show up in the count because they're transiting with transponders switched off. ADNOC itself has reportedly used this workaround, according to IndexBox.

The supply squeeze is showing up in fuel markets. The US Energy Information Administration reported distillate inventories, which include diesel and heating oil, fell for a third straight week as of August 19. Crude inventories, oddly, rose by 4.4 million barrels the week ending August 14, when analysts had expected a 600,000-barrel drop, according to the Epoch Times.

UAE cuts ties with Iran

Tensions escalated further this week. The UAE suspended all financial and economic transactions with Iran until further notice, according to the Epoch Times. The move came after the UAE's defense ministry said it detected two ballistic missiles launched from Iran that it said targeted "maritime traffic," both of which fell into the sea. Iran's foreign ministry called that claim "baseless."

Iraq, meanwhile, approved a temporary mechanism allowing crude exports through international and local companies via multiple outlets, a three-month arrangement starting September 1, according to Fox News's coverage of Reuters reporting. The goal is to reduce Iraq's dependence on the same Gulf shipping routes squeezed by the standoff.

Where the diplomacy stands

CNN's live coverage from earlier this month captured Iran and Oman signaling they were close to a deal on managing the strait, but Iranian officials made clear that traffic wouldn't return to normal until the US agreed to end the war, withdraw troops, and pay compensation. These demands were laid out by Iran's national security chief Mohammad Bagher Zolghadr. Oman warned that continued attacks on shipping could derail any progress. CNN also reported that the chairman of the Joint Chiefs of Staff privately told colleagues the US needs an off-ramp, because further military escalation carries real risk of backfiring—a striking admission from inside the Pentagon that the war has no clean military resolution on the table.

President Trump said Tuesday that no negotiations were underway and insisted the strait remained open, a claim contradicted by Iran's parliamentary speaker Mohammad Bagher Ghalibaf, who said Hormuz would stay closed until the US met its MOU commitments, according to Fox News. Trump posted that Iran had been offered "the greatest opportunity" to make a deal and "failed to take it."

On the military side, Under Secretary of War for Acquisition and Sustainment Michael Duffey told Fox News's "Special Report" that the Pentagon is racing to rebuild depleted stockpiles, arguing the Biden administration "did not focus on developing the industrial base that we need." That reflects the administration's stated rationale for its current munitions push.

None of the sources here document a ceasefire, a signed Hormuz management deal, or an end date to the conflict. The Iraqi export mechanism launches September 1. ADNOC's current tender closes August 24. Both are concrete, dated markers to watch for whether Gulf producers keep finding ways around a blockade that, six months in, still has no resolution in sight.