United Arab Emirates oil giant Abu Dhabi National Oil Co. imported a crude oil cargo in a rare move after upgrading its only refinery, which will allow it to sell more of its own higher-value barrels.
Adnoc upgraded its Ruwais refinery to process heavier and cheaper crudes like Iraqi grades and Abu Dhabi’s own offshore barrels. That means it can export more supplies of its own Murban crude, which is lighter and more valuable.
The tanker Orient M delivered a cargo of about 1 million barrels of Basrah crude from Iraq to Ruwais earlier this month, according to Bloomberg tanker-tracking data and ship-agent reports.
After completing maintenance at Ruwais last month, Adnoc is integrating the new units to process a diverse slate of crudes, according to people with knowledge of the project. That will let Adnoc to continue buying barrels from other producers when they’re cheaper, said the people, who asked not to be identified when discussing operations.
Adnoc declined to comment.
Ruwais can process more than 900,000 barrels a day of crude into fuels like gasoline, diesel and jet fuel, as well as products for chemical plants. It was initially designed to process Abu Dhabi’s flagship Murban crude, pumped from the emirate’s onshore fields.
Murban is lighter and sweeter than most other Middle Eastern crudes, meaning it flows more easily and has less sulfur. That makes it easier to refine and usually allows those barrels to fetch a higher price.
Upgrading the refinery allows Adnoc to use its own heavier Upper Zakum crude that’s produced offshore, and similar barrels. Complex refineries can process these cheaper and more difficult crudes into valuable transport fuels, helping to boost margins.
Still, heavier Middle Eastern grades have gained in value relative to other barrels as OPEC+ output cuts remove more of that type of oil from the market. For example, prices of Upper Zakum, which usually fetch a discount to Murban, have risen amid the OPEC+ cuts and as Adnoc diverted some of the barrels to Ruwais — with the offshore crude even trading higher than the lighter onshore barrels this month.
Brent crude is trading near $90 a barrel, partly due to the reductions by the Organization of Petroleum Exporting Countries and its allies.
Adnoc has also been making regular tanker voyages between the offshore Zirku Island loading terminal, from which Upper Zakum crude is shipped, to Ruwais over the past two months, ship-tracking data show. It cut some supplies of that crude to customers as it used more barrels in Ruwais, instead selling other grades like Murban to buyers.
Adnoc has purchased non-UAE crudes before, such as lighter African grades, some US shale oil and even a Russian cargo. This is the first time it’s bought heavier oil from the Middle East to run through the upgraded refinery.
