Abu Dhabi National Oil Company (ADNOC) has bought five very large crude carriers (VLCC) for about $590 million, three sources familiar with the matter said, expanding its fleet as conflicts in the Red Sea and the Strait of Hormuz tighten tanker supply.
The acquisitions are part of a broader push by the UAE producer to control more of its supply chain, allowing it to move crude to customers even as geopolitical tensions disrupt two of the world's busiest maritime routes.
ADNOC Logistics and Services (ADNOC L&S) recently bought the five VLCCs from tanker company Frontline, the sources said.
Of these, two 2012-built vessels were purchased for about $115 million each, and three built in 2015 cost about $120 million each, the sources said.
"We do not comment on rumours or market speculation. ADNOC L&S continually reviews its fleet requirements and strategic growth opportunities," the company said in an emailed statement.
"As a matter of policy, any announcements relating to potential transactions are made in accordance with the company's internal governance processes and applicable disclosure obligations."
Frontline declined to comment.
While producers such as Iraq, Qatar and Kuwait are struggling to place oil in the market due to the disruption from the war in the Middle East, former OPEC member United Arab Emirates has sold millions of barrels to refiners through direct sales and spot tenders.
ADNOC has also acquired three very large gas carriers (VLGC) for about $115 million each, one of the sources said.
ADNOC L&S has also ordered another 25 to 30 new vessels, including crude tankers, LNG carriers and LPG carriers, from various shipyards, this source said.
ADNOC L&S operates more than 900 vessels including seven VLGCs and eight VLCCs, according to a fact sheet posted on its website.
The investment in new ships follows months of disruption to shipping through the Red Sea and the Strait of Hormuz.
Besides expanding its owned fleet, the company also chartered about 25 crude tankers from South Korea's Sinokor after the regional crisis escalated, the source added.
About 15 vessels were deployed as shuttle tankers to move crude from facilities inside the Strait of Hormuz to storage terminals in Fujairah and Oman, while the remaining vessels supplied customers directly, the source added.
Sinokor did not respond to a Reuters request for comment.
(Reporting by Nidhi Verma, Jonathan Saul and Ahmad Ghaddar; Editing by Raju Gopalakrishnan)