ADNOC to reduce crude oil shipments from this month

Abu Dhabi's national oil company (ADNOC) will reduce crude shipments from this month, in line with a surprise decision by OPEC+ to tighten supply.

ADNOC will cut its shipments of all cargo by 5% from May. This is within the lower bounds of the operating tolerance rules for long-term contracts, under which the company has the ability to deliver plus or minus 5% of production per month.

That suggests a member of the OPEC+ alliance is working to implement the group's production cuts of about 1.6 million barrels per day by July. Saudi Arabia pledged in April to cut supply by 500,000 barrels per day, and other member states including Kuwait, the United Arab Emirates and Algeria have followed suit.

The United Arab Emirates is OPEC's third-largest oil producer. Middle Eastern producers, including ADNOC, have operating tolerance rules in their long-term contracts with customers, which allow them to adjust supplies based on the exact capacity of different tankers. But tolerances can also be used to unilaterally reduce supply.