UAE Substitutes Qatar Condensate With US Oil

The United Arab Emirates will import the country's first oil cargo from the United States, two sources familiar with the matter said, as the OPEC producer sought substitutes to replace Qatari condensate supplies after a diplomatic row.

The UAE halted condensate imports from Qatar after it, along with Saudi Arabia, Egypt and Bahrain, severed diplomatic and transport ties with Qatar after accusing it of destabilizing regional security, a claim denied by Doha, Reuters reported.

Abu Dhabi National Oil Company, or ADNOC, bought a US Eagle Ford condensate cargo in a tender for September arrival, the sources said on Wednesday. Specific volumes were not available but the cargo will arrive in a supertanker that can carry up to 2 million barrels of oil, one of the sources said.

ADNOC faced limited options in sourcing for condensate substitutes as strong demand for the ultra-light oil in South Korea and Indonesia tightened supplies in Asia, trade sources said.

This forced the state oil company to look for supplies from other regions, including Eagle Ford condensate from the United States.

ADNOC used to receive 1-1.5 million barrels of Qatari condensate every month under a term agreement with Qatar Petroleum, trade sources said earlier.

Condensate is a byproduct of natural gas production and the oil is processed at refining units to produce mainly naphtha, a petrochemical raw material. ADNOC earlier bought Khuff condensate from Saudi Arabia to replace Qatari supplies, trade sources said, but the production volume of this oil is small and it is usually consumed locally.