Adnoc Large Crude Sales to China Unsettle Asian Market

Adnoc’s shift in its oil sales strategy has been disrupting the Asian market at a time when world oil prices already have been under severe pressure.

Marketing challenges it has faced this year may have a bearing on future strategy and commercial relationships for Adnoc, as Abu Dhabi National Oil Company is usually known, as it considers crucial decisions about which partners it will choose for the development of ambitious oil and gas projects.

However, this was not the reality in the market, according to a number of traders and oil company executives, who said that ChinaOil was buying the crude partly to manage a derivatives position and was taken by surprise when it was swamped by the unusually large amount of Upper Zakum that was available.

Typically, people would only speak if they were not quoted by name because of commercial relationships. Adnoc officials cited a standing policy of not commenting on crude oil marketing strategy. Qiunan Wu, the Dubai-based Middle East head of ChinaOil, also declined to comment.

“What I suspect they will see is that when you are involving a partner, you are not only buying access to technology but to an understanding of the market,” said the Middle East head of a major international oil company. “So, yes, it is important to have the final customer as a partner, but having a global portfolio is also very important.”

（thenational.ae  Edited by Topco)