Russian oil giant Lukoil and independent producer CenGeo have supplied the UAE’s national oil firm ADNOC with CPCblend, marking the first time the UAE’s purchased the crude blend from Russia, Reuters reported.
Earlier in August, Lukoil also delivered 123,000 tons of CPC Blend oil to the Ruwais terminal via a Delta Hellas tanker, although ADNOC declined to comment on the purchase. CPC Blend is crude oil transported in the common stream through the Caspian Pipeline Consortium pipeline system. The UAE sometimes imports different grades for its refineries to take advantage of price differentials.
Unlike Western countries, the UAE has not imposed sanctions on Russia. In addition, the U.S. Office of Foreign Assets Control (OFAC) has announced that CPC Blend oil is not subject to sanctions restrictions if it is of Kazakh origin, although it has suggested that buyers of the blend obtain certificates of origin. In addition, the U.S. warning applies only to sanctions-compliant buyers.
Heavy trading in Dubai oil has pushed its premium over WTI crude to record levels, a development that experts say could make U.S. crude even more competitive in Asia. After Persian Gulf producers such as Saudi Arabia raised prices and shipping costs rose, more traders turned to Dubai. Dubai swaps were trading at a wide premium to West Texas Intermediate futures in Singapore, the U.S. benchmark, Bloomberg reported. Increased trading of partials-smaller lots that are accumulated and converted into physical cargoes-is also boosting Dubai oil prices.