Oil world turned upside down as UAE buys oil from US
International News
The United Arab Emirates isn’t the most obvious customer for Texan oil. Yet, in a trade that illustrates how the rise of the American shale industry is upending energy markets across the globe, the UAE bought oil directly from the US in December, according to data from the US government. A tanker sailed from Houston and arrived in the Gulf last month. The cargo of American condensate, a type of very light crude oil, was preferred to regional grades because its superior quality made more suitable for the UAE’s processing plants, a person with knowledge of the matter said, asking not to be identified discussing a commercially sensitive matter. Until last year, the UAE relied on Qatar for its condensate supply. But after the four Arab countries imposed the illegal blockade on Qatar, the UAE banned all petroleum ships from Qatar. But, UAE is still dependent on Qatar gas to keep Dubai lit. Without the energy from Qatar through a pipeline, Dubai’s glittering skyscrapers would go dark for lack of power. Qatar has not cut off gas to the UAE despite a force majeure clause it is entitled to. "The siege we have today is a force majeure and we could close the gas pipeline to the UAE," Qatar Petroleum CEO Saad al-Kaabi had said in an interview earlier. "But if we cut the gas, it does great harm to the UAE and the people of the UAE, who are considered like brothers ... we decided not to cut the gas now," he added. The end of a ban on US exports in 2015 coupled with the explosive growth of shale production, has changed the flow of petroleum around the world. Shipments from US ports have increased from a little more than 100,000 barrels a day in 2013 to 1.53 million in November, traveling as far as China and the UK. "As a member of OPEC and a large crude producer, I would imagine they would be very self-sufficient in their own crude supply,” said Andy Lipow, president of Lipow Oil Associates LLC. The purchases of US oil aren’t likely to continue, given the UAE’s own supply, Lipow said. US Exports The US exported about 700,000 barrels of light domestic crude in December to the UAE, the Census Bureau reported Tuesday. It’s the fourth-largest OPEC producer’s first cargo of US oil, according to Energy Information Administration data. Although it exports more than two million barrels a day, the Middle Eastern country typically imports extra-light condensate to process in a unit known as a splitter. UAE crude production was 2.85 million barrels a day in January, according to data compiled by Bloomberg. Output has declined from 3.07 million at the end of 2016 as OPEC and allies cut production to reduce a global glut and prop up prices. The cargo was shipped from Enterprise Products Partners LP’s Houston terminal on the tanker Seoul Spirit, which arrived January 31 at the Port of Ruwais in Abu Dhabi, according to ship tracking data compiled by Bloomberg. Courtesy: https://www.thepeninsulaqatar.com
February 08, 2018 TO February 08, 2018
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