Saudi Aramco halts oil shipments to Egypt indefinitely

Published November 7th, 2016 - 12:00 GMT
Last month, Egypt had not received October allocations of petroleum aid from Saudi Arabia, forcing its state oil buyer to rapidly increase tenders. (Shutterstock)
Last month, Egypt had not received October allocations of petroleum aid from Saudi Arabia, forcing its state oil buyer to rapidly increase tenders. (Shutterstock)

Saudi Aramco informed Egypt that it is suspending petroleum product shipments “until further notice,” Hamdy Abdel Aziz, spokesperson for the Ministry of Petroleum, said.

Egypt has not received November’s shipments, Abdel Aziz told Aswat Masriya.

“Aramco informed us in September that it would halt the shipments until further notice,” he said, “there have been no developments since, so the shipments will therefore continue to be suspended.”

Last month, traders said that Egypt had not received October allocations of petroleum aid from Saudi Arabia, forcing its state oil buyer to rapidly increase tenders.

The Saudi Arabian national oil firm had told Egypt then that it would halt the supply for October.

In April, Saudi Arabia agreed to provide Egypt with 700,000 tonnes of petroleum products a month for five years, as part of aid to the struggling Egyptian economy. The $23 billion agreement between Aramco and Egyptian General Petroleum Corp was signed after an official visit by Saudi Arabia's King Salman.

Saudi oil shipments, along with other aid from Saudi Arabia, are considered a key pillar in helping Egypt maintain its foreign reserves, which should rise to $25 billion, according to the Central Bank of Egypt’s governor. In September, they had reached $19.6 billion.

Abdel Aziz said that the ministry launched international tenders to secure its November needs.

Tensions heightened between Saudi and Egypt after the latter on Saturday in favour of two draft resolutions on Syria, the first was backed by Russia and the second was backed by France.   

The Saudi envoy to the UN Abdullah al-Muallami criticised the Egyptian vote on the Russian resolutions and described Egypt’s stance as “painful.”

However, President Abdel Fattah al-Sisi denied shortly after that the suspension of Saudi oil shipments is linked to Egypt’s vote on two resolutions at the UN Security Council on Syria.

 

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