Japan's JBIC extends up to $3 bil loan to UAE's ADNOC for stable oil supply

The state-owned Japan Bank for International Cooperation said Nov. 18 it has signed an agreement along with a group of commercial banks to extend up to $3 billion in loan to the UAE's Abu Dhabi National Oil Company for stable oil supply over the long term.

JBIC will lend $2.1 billion to ADNOC, with the rest being provided by Sumitomo Mitsui Banking Corp., Tokyo Branch of the Hongkong and Shanghai Banking Corp., Mizuho Bank, and MUFG Bank.

This is JBIC's sixth loan agreement with ADNOC, following about $3 billion, each, in 2007, 2010, 2013, 2016 and 2018.

The latest loan deal comes as the UAE remained Japan's largest crude supplier for the third consecutive month in September, mainly due to increased imports of Murban crude.

Local refiners had boosted imports of Murban crude, the light sour Abu Dhabi grade, to 532,970 b/d in September, according to the Ministry of Economy, Trade and Industry data, reflecting Japanese oil companies' active participation in the trading of ICE Futures Abu Dhabi, or IFAD, Murban crude futures, which were first launched March 29.

METI minister Koichi Hagiuda sought the UAE's cooperation to stabilize crude oil markets by measures, including, raising crude oil production, during an Oct. 25 teleconference with UAE energy minister Suhail al-Mazrouei.

The rare move by the METI minister, the first since the 2008 price rise, came after an Oct. 18 directive from Prime Minister Fumio Kishida to respond to rising oil prices.

JBIC also signed a memorandum of understanding with ADNOC to further strengthen the strategic partnership with a focus on decarbonization, energy transition, and energy efficiency sectors.