UAE's ADNOC cuts August term volumes by 5% for all four crude oil grades: source

Dubai — Crude oil volumes from Abu Dhabi National Oil Co. for its term customers over August will be reduced by 5% for all four grades, a source familiar with the situation told S&P Global Platts on June 28.

ADNOC informed customers who lift contracted monthly volumes -- known as term lifters -- that it would cut the quantity of volumes available for export over August by 5% for its more popular Murban and Upper Zakum grades and for Umm Lulu and Das Blend, the source said.

It follows the same 5% cut that ADNOC made for July. June term volumes of Murban and Upper Zakum had been slashed 20%, with Das Blend and Umm Lulu cut 5%, as the UAE joined Saudi Arabia, Kuwait and Oman in enacting voluntary additional cuts below their OPEC+ quotas for that month only.

The news comes as OPEC and its allies have yet to decide whether to extend a historical production cut accord of nearly 10 million b/d beyond July. The deal is scheduled to ease to collective cuts of 7.7 million b/d starting in August, though the OPEC+ coalition has said it may amend the deal as needed on a monthly basis to manage the oil market's recovery from the COVID-19 pandemic.

The coalition will next meet Nov. 30 and Dec. 1 in Vienna, but a key OPEC+ monitoring committee co-chaired by the coalition's largest members, Saudi Arabia and Russia, is scheduled to hold an online meeting July 15. The committee is empowered to make recommendations to the wider coalition, which would have to call an extraordinary session to approve any changes.

A Gulf OPEC delegate, who spoke on condition of anonymity, said some preliminary discussions had been held on extending the cuts through August but that no conclusions had been made.