Egypt turns to international spot market in the absence of Aramco oil deliveries

Published November 9th, 2016 - 10:00 GMT
Saudi Arabia has informed Egypt that shipments of oil products expected under a $23 billion aid deal have been halted until further notice, suggesting a deepening rift between the two countries. (Shutterstock)
Saudi Arabia has informed Egypt that shipments of oil products expected under a $23 billion aid deal have been halted until further notice, suggesting a deepening rift between the two countries. (Shutterstock)

Egypt is obtaining refined oil products from the international spot market following a decision by Saudi Aramco to halt product shipments until further notice, Egyptian Petroleum Minister Tarek El Molla said on Tuesday.

Speaking on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), El Molla said Egypt was meeting producers and traders, and whoever could provide reliable terms would be able to strike a deal with his country.

"What we are doing now we are getting from the international trading market," he told reporters.

Asked if he was looking for longer term deals, he replied: "Not necessarily .... depending on pricing and opportunities ... We have been getting refined products in the market anyways even when we had Aramco we were still importing from the market."

"You know sometimes spot can be cheaper."

Saudi Arabia has informed Egypt that shipments of oil products expected under a $23 billion aid deal have been halted until further notice, suggesting a deepening rift between the Arab world's richest country and its most populous.

During a visit by Saudi King Salman in April, Saudi Arabia agreed to provide Egypt with 700,000 tonnes of refined oil products per month for five years but cargoes stopped arriving in early October as festering political tensions became public.

The minister added: "It is not a matter of replacing (Saudi supplies), it is having reliable better terms, whoever can offer us that we will have a deal with."

Asked if he was in active talks with anyone, he replied: "No not necessarily, we are in general meeting with producers and traders."

On gas imports, El Molla said Egypt expected to stop importing liquified natural gas by fiscal year 2021.

"We will eventually resume exports as we have some commitments to export and contracts to honour," he said.

 

By William Maclean; Editing by Michael Perry

 

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