27 June 2025: 09:30 BST
They’re playing ping pong with the market! But nobody’s laughing. Adnoc is undoing its cut to cargo allocations after a monumental backlash from lifters and the market at large. Some hedges had already been lifted as they had to adapt to receiving 400 kb rather than 500 kb, but now they’ll be getting 500 kb again! This has totally ruined risk management for the affected players and is the worst commercial mistake we’ve ever seen in oil markets! As one source commented, the lifters’ hedges could be 10 bucks higher due to the war craziness of the past week.
The question is now how lifters react: they could refuse to take the full 500 kb amount, having prepared to receive 400 kb they were told to expect. It comes down to who controls the taps pumping the crude into the ship – will they back Adnoc or the lifter…? One trader said “This feels like even more of a spit in the face!” People are not happy – even those not directly affected by the unilateral chopping and changing of allocations. We feel most of all for those who’ve been messed around by this. These wounds are entirely self-inflicted and we ask what kind of market understanding was lacking by those making the decisions…
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