UAE Changes Up Its Light Sweet Suppliers

Share on twitter
Share on linkedin

Following on from last week’s blog on Algerian crude exports and US shale, we follow the dots to look at the changing flows from these two sources into the United Arab Emirates. The ongoing political and economic boycott of Qatar from the likes of Saudi Arabia and US sanctions on Iran’s oil industry encouraged the UAE to pivot toward the US and Algeria for light-sweet crude and condensate.

The first shipment from the US to the UAE discharged in September 2017, the year Saudi Arabia, the UAE, Egypt and Bahrain cut ties with Qatar due to political disputes. Suezmax Maran Pythia delivered 772,000 barrels of Eagle Ford grade to the port of Ruwais as the UAE sought an alternative to Qatari Rasgas condensate.

Emirati imports of US oil, mostly in the form of Eagle Ford condensate, have been climbing since 2018, averaging 43,000 bpd through the first 10 months of the year, with barrels delivered to the ports of Jebel Ali and Ruwais.

In 2018, meanwhile, Algerian condensate deliveries to the UAE began with a shipment arriving that July, just as Washington was preparing to reintroduce sanctions on Iran. Similar to US flows, Algerian deliveries to the Emirates are at a record high this year, averaging 17,000 bpd through the first 10 months of 2019.

Algeria and the United States have not been the only countries increasing condensate deliveries to the UAE. Imports from Libya have been on the rise since September 2018, with more shipments from Mellitah seen this year.

The chart below starkly exhibits the change in sources for light sweet barrels into the UAE in recent years:

As the chart illustrates, Iran and Qatar have been pushed out as the key suppliers to the UAE. Iran is under biting sanctions that have curtailed its exports, while Doha remains isolated by some Arab nations, though there are efforts to end the rift. This created an opportunity for North African and US producers, and they have taken full advantage of it.