"UAE State Oil Company Says 'Take Your Crude Oil'... Shipping Firms Remain Hesitant"

US and Iran Enter 60-Day Ceasefire After Peace Agreement
Shipping Companies Remain Cautious About Strait Transit
Oil Prices Decline... Brent Crude Falls to the $79 Range

As the United States and Iran have entered a 60-day temporary ceasefire, it has been reported that the United Arab Emirates (UAE) state-owned oil company has notified crude oil buyers that it will resume shipments. The company also warned that failure to deliver cargo as scheduled would result in liability for breach of contract. However, shipping companies remain cautious about crossing the Strait of Hormuz, suggesting it will take time for crude oil transport to fully normalize.

ADNOC (Abu Dhabi National Oil Company) logo. Photo by Reuters Yonhap News

According to Bloomberg News on June 19, Abu Dhabi National Oil Company (ADNOC) announced to its customers via a notice that it would resume crude oil shipments from the Das and Zirku Island ports in the Persian Gulf. The outlet reported that multiple long-term contract buyers have confirmed this information as well.

The company maintains that all cargo must be delivered to buyers according to the scheduled timeline. In particular, it emphasized that buyers would be in breach of contract if they fail to receive the crude oil. The notice also stated that if buyers are unable to take delivery, they must pay compensation to the seller. Furthermore, ADNOC said it could provide support in securing vessels if buyers are unable to do so themselves. However, according to Bloomberg, ADNOC did not immediately respond to requests for comment on the matter.

The Donald Trump administration in the United States has stated that the Strait of Hormuz is rapidly returning to normal following the agreement. U.S. Vice President J.D. Vance said that 12.5 million barrels of crude oil passed through the Strait of Hormuz over the previous night. Before the outbreak of the war, about 20 million barrels of crude oil and petroleum products passed daily through the Strait of Hormuz, which serves as a critical supply route for approximately 20% of the world's oil.

International oil prices are also trending downward following news of the reopening of the Strait of Hormuz. As of today, the August contract for Brent crude, the global oil price benchmark, is trading at USD 79.67 per barrel, down about 9% from the previous week. The July contract for West Texas Intermediate (WTI) crude is trading at USD 76.33 per barrel.

However, shipping companies are still reportedly hesitant to resume transits through the Strait of Hormuz. Jan Rindbo, CEO of Danish shipping company DS Norden, said, "Everyone wants to send their ships back out, but there is no need to be the first to do so," adding, "Resuming operations may help build trust, but the situation remains unstable." He further noted, "Even a small incident could erode trust again."

Tiago Lacerda, an analyst at market research firm Axi, told business outlet CNBC that Brent crude is likely to trade in the USD 75 to 82 range in the short term. He added, "Major shipping companies have yet to resume operations, and insurance premiums remain high," and, "The market still maintains a cautious stance regarding the pace of normalization."

This content was produced with the assistance of AI translation services.