Abu Dhabi National Oil Co. has committed $1.3 billion to nearly double its fleet of Very Large Crude Carriers to 14 from eight, buying six on the secondary market for delivery this quarter, while also adding Very Large Gas Carriers, three secondhand vessels arriving this quarter and two newbuilds slated for the fourth. The outlay comes as the United Arab Emirates exits OPEC and pushes roughly 3.6 million barrels a day of crude through a Strait of Hormuz that has been largely choked off by the war between the United States and Iran.
The fleet expansion
Adnoc Logistics and Services acquired all six VLCCs and three of the VLGCs on the secondhand market, taking delivery this quarter, with the remaining two gas carriers due in the fourth quarter. The VLCC additions increase the company’s owned supertanker capacity, a meaningful buffer when charter rates are climbing and available tonnage is scarce.
The OPEC exit and export surge
The UAE’s departure from OPEC. The 3.6 million barrels a day shipped over the past two months already exceeds the capacity of the Abu Dhabi Crude Oil Pipeline, which can move less than half that volume around Hormuz. That arithmetic makes waterborne export capacity a hard constraint, not a discretionary line item.
The Hormuz bottleneck
Since the Iran war began, Adnoc has moved more crude through the Strait than any other producer, often running its own and chartered vessels at night under military escort to transfer cargoes outside the Gulf. Saudi Arabia, by contrast, has leaned on its east-west pipeline to the Red Sea, a luxury the UAE’s geography does not fully replicate.
The scramble for tonnage
Tanker markets were tightening before the conflict, driven in part by a South Korean tycoon backed by a unit of the world’s largest container line snapping up dozens of supertankers. A senior industry executive said earlier this year that producers have been scrambling for tonnage; Adnoc’s purchase suggests that scramble has moved from the charter market to the balance sheet.