UAE-owned ADNOC Gas has reported a 52% slide in its Q2 profit, with sales hit by the closure of the Strait of Hormuz since the beginning of the Iran war. The company’s second-quarter profit fell to USD 665 million from usd 1.39 billion a year earlier but managed to beat its guidance range of USD 400 million to USD 600 million.
The integrated gas company, in Q2, relied on its domestic market to sustain profits, with USD 1 billion of its USD 1.7 billion of H1 net profit coming from local clients.
“The majority of the profit comes from domestic markets; that is really the backbone of our operational results,” CFO Peter van Driel said.
The Middle East conflict has hurt oil-rich Gulf countries, with Iran picking up the region’s energy infrastructure, along with oil tankers, as its retaliation targets against the US-Israeli offensive, while also blocking shipping in the strategically important Strait of Hormuz, which previously carried a fifth of the world’s oil and liquefied natural gas (LNG).
ADNOC, the parent company, too has felt significant impact from what it described as unprovoked attacks on its people and assets. One of its tankers was attacked in Hormuz as recently as Saturday (August 8).
Till August 10, 15 of its vessels had been attacked by missiles and drones while transiting the Strait of Hormuz since the start of the conflict, leaving one crew member dead and 20 injured.
ADNOC said it was working closely with relevant authorities and taking all necessary measures to protect its people, assets, and operations, while meeting customer requirements as much as possible.
“ADNOC Gas has been looking at different options while monitoring the situation in the Strait of Hormuz. We cannot be in this environment and not look at alternatives,” CEO Fatema Al Nuaimi told the media persons.
The venture has now estimated its Q3 net income in a range of USD 600 million to USD 800 million, from USD 3.5 billion to USD 4 billion for the full year.
Despite the geopolitical disruptions, the venture plans to expand oil and gas sales, expecting to invest about USD 28 billion between 2026 and 2030 to deliver growth.
“ADNOC Gas delivered resilient second-quarter net income above our guided range despite a challenging operating environment,” the company said.
It has also awarded USD 8.2 billion in engineering, procurement and construction contracts during the quarter for the second and third phases of its Rich Gas Development project.
The second phase, to be delivered by Wison Engineering, will add a new natural gas processing unit at the Habshan facility.
“Phase three, to be delivered by Tecnimont, an arm of Italian company Maire, will add a new natural gas liquids (NGL) fractionation unit at Ruwais, aimed at increasing the recovery of higher-value liquids from natural gas for export,” ADNOC Gas noted.
Expansion at the logistics level
Adnoc Logistics & Services has agreed to acquire 11 tankers for approximately USD 1.3 billion, expanding its crude oil and liquefied petroleum gas shipping capacity to support Adnoc Group’s growing production, trading and export activities.
The acquisition comprises five very large gas carriers and six very large crude carriers. Nine of the vessels—six VLCCs and three VLGCs—were bought on the secondary market and are scheduled for delivery in Q3 2026, entering service with Adnoc L&S immediately afterwards.
The remaining two VLGCs are newbuild vessels acquired through a resale transaction from a Chinese shipyard, with delivery due in the fourth quarter of 2026.
Once delivered, the additions will lift Adnoc L&S’s fleet to 14 VLCCs and 12 VLGCs, increasing its capacity to move crude oil and LPG across international markets.
Reuters reported last month, citing sources, that Adnoc L&S had separately purchased five VLCCs from Frontline Plc. The company’s fact sheet states it operates more than 900 vessels in total.
“This USD 1.3 billion investment reflects the disciplined execution of our growth strategy and our commitment to building world-class maritime logistics capabilities for the energy sector,” said Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S.
“By adding 11 vessels, we are expanding our capacity to support Adnoc’s growing exports, serve customers in key markets and capture opportunities in international energy trade,” the official added further.
The company said the deal would provide near-term operational and earnings benefits while enhancing the scale, flexibility, and resilience of its shipping platform.
The purchase follows a rapid expansion of Adnoc L&S’s fleet. In July, it signed a Dh3.3 billion (USD 900 million) order for four next-generation LNG carriers to be built at Jiangnan Shipyard in Shanghai for delivery in 2029, taking its total LNG newbuild program to 18 vessels.
Including its 50% share of the AW Shipping joint venture with Wanhua Chemical Group, the company has committed billions of dollars to fleet growth since 2022.
In May this year, ADNOC L&S said it would press ahead with its fleet expansion and modernization plans despite the Hormuz disruptions.
The following month, it upgraded its full-year 2026 guidance, with net profit now projected to rise more than 60%, well above earlier forecasts of mid-to-high-teens growth, while revenue is expected to grow at a low single-digit rate rather than decline.
The fleet build-out also underpins Adnoc’s broader gas strategy, following the recent launch of a global LNG marketing and trading platform targeting 47 million tonnes per annum of combined marketable LNG by 2035.