Egypt: After Saudi halt, oil products to come from spot market

November 8, 2016 12:55 pm

Egypt on the lookout for spot markets after Saudi Arabia halts monthly shipments. (Image: Reuters)

Move follows Aramco decision to indefinitely halt oil products shipments to Egypt

“Sometimes, spot market is cheaper”: Egypt Petroleum Minister

Egypt expects to stop importing liquefied natural gas by fiscal year 2021.

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.”

He added: “You know, sometimes, [the] spot [market] 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 nation.

Aid deal

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 [about] having reliable, better terms. Whoever can offer us that, we will have a deal with.”

Asked if he was in active talks with anyone in particular, he replied: “No, not necessarily. We are in general meeting[s] with producers and traders.”

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

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

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Hind Mustafa
By Hind Mustafa
Journalist
Hind Mustafa specializes on the business of luxury in the region; she also covers hospitality and technology sectors. With more than four years' experience, she brings depth and clarity to the region's business news and views.



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