Abu Dhabi National Oil Co. will sell offshore crude oil for collection outside the Strait of Hormuz at levels indexed to the Dubai benchmark, according to a price sheet seen by Bloomberg. The United Arab Emirates’ largest oil company will set the price of the oil, if collected on a ship-to-ship transfer basis at Fujairah, against the Dubai benchmark for August; Upper Zakum and Das crudes can be bought at an 80-cents-a-barrel premium to Dubai, while Umm Lulu will be priced at a $1-a-barrel premium. YourDailyAnalysis treats the choice to formalize a separate, indexed price sheet for non-Hormuz collection as more informative than the specific premiums themselves: Adnoc is building durable commercial infrastructure around avoiding the strait, not just offering a temporary workaround.
Fujairah’s geography is the entire point of this pricing structure, and it’s worth being explicit about why. The port sits on the UAE’s eastern, Gulf of Oman coastline, meaning oil collected there via ship-to-ship transfer never has to pass through Hormuz at all – these grades still originate from locations inside the Persian Gulf, but Adnoc is now giving buyers an explicit, separately priced option to take delivery in a way that sidesteps the chokepoint entirely, while continuing to offer the same crudes from their usual, Hormuz-transiting sites as well.
This pricing move sits inside a broader pattern of UAE policy shifts since the conflict began, which is the more significant context. The UAE has been adjusting its oil policy following the outbreak of the Iran war, given disruptions to flows through Hormuz that have convulsed the market and stoked regional tensions; among recent changes, the country quit OPEC in May and accelerated work on a pipeline to expand flows to Fujairah. YourDailyAnalysis reads the OPEC exit and the pipeline acceleration as part of the same underlying strategy this pricing sheet reflects – the UAE has been methodically building independence from both an OPEC-coordinated supply framework and from Hormuz-dependent logistics since the war started, and this price sheet is simply the latest, most granular expression of that same push.
The production numbers underline that this is a country actively capitalizing on the disruption rather than merely defending against it. Despite the ongoing conflict, the UAE boosted oil production to an all-time high last month, according to the International Energy Agency – a striking data point given that the conflict has simultaneously curtailed shipping through the strait its own oil traditionally transits, meaning the UAE has been successfully rerouting and expanding output even as the traditional export corridor remains under strain.
Adnoc’s own explanation for the change was notably thin, which is itself worth flagging. The company was offering the new, alternative prices and delivery conditions for offshore grades “in light of current market conditions,” it said in the price sheet, without elaborating; its crude-marketing team had spoken with refiners and traders in at least Singapore and Japan since late last month on the planned changes. YourDailyAnalysis notes that outreach to Asian refiners specifically, ahead of the formal announcement, suggests Adnoc was testing demand for the non-Hormuz option among its largest customer base before committing the pricing structure to a published sheet.
Watch whether other Gulf producers introduce similar non-Hormuz pricing structures in the coming weeks, which would confirm this is becoming an industry-wide response rather than an Adnoc-specific hedge, and watch how much volume actually flows through the Fujairah ship-to-ship option once August loadings begin. Your Daily Analysis views the take-up rate on this new pricing option as a more reliable real-time gauge of how much the market still distrusts Hormuz’s safety than any official statement about the strait’s status.
