UAE Oil Producer Expands Tanker Fleet Amid Rising Exports

The UAE’s largest oil producer, Adnoc, is expanding its tanker fleet to meet rising crude oil exports and strengthen its transportation capacity against uncertainties in the Strait of Hormuz. The company spent approximately $1.3 billion to increase its VLCC fleet from 8 to 14 vessels and also purchased 5 fuel carriers.

Despite tanker traffic in the Strait of Hormuz being severely disrupted due to the war with Iran, Adnoc has transported more crude oil through the strait than any other oil producer over the past two months. Since the UAE’s pipeline bypassing the strait can handle less than half of the roughly 3.6 million barrels per day of exports, access to tankers has become critical.

While Adnoc is using its tanker fleet to secure its own exports, rising tanker costs and limited capacity in the market are also encouraging producers to expand their own fleets. Most of the vessels purchased by the company were acquired on the second-hand market, while the remaining newbuild VLGCs are expected to be delivered in the fourth quarter of the year.