ADNOC cuts July term volumes by 20%, complies with OPEC+ policy

London (Quantum Commodity Intelligence) – Abu Dhabi National Oil Co has informed its term customers of supply cuts for its Murban, Das Blend and Upper Zakum crude oil grades for July-loading cargoes by 20%, reported S&P Global Platts Friday.

The Platts report said that cuts of 20% for the three grades were on the higher side and more than the usual volumes cuts in recent months.

The reductions to term volumes are, however, consistent with ADNOC's pledges within the OPEC+ producer group, said Quantum sources, and may include 'compensatory' cuts within the broader OPEC+ agreement.

The producer group removed around 8 million barrels per day of output to allow global markets to rebalance in the wake of the coronavirus pandemic. The 20% figure is measured against maximum term volumes and is not a 20% cut from the previous month.

From June all ADNOC crude will be priced against ADNOC's flagship Murban grade, using a monthly average of the recently-launched ICE Futures Abu Dhabi (IFAD) Murban futures contract.

Murban will be at parity to the monthly IFAD average, while the other grades will be set at a differential to Murban.

Murban's production capacity is around 1.7 million barrels per day, Upper Zakum 700,000 b/d and Das Island around 600,000 b/d, making the UAE producer one of the most important oil exporters in the world.