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Egypt Begins Receiving Imports From Unspecified Source After Aramco Debacle

Oil rig sunset

Egypt received oil shipments from an unspecified source on Tuesday, according to Petroleum Ministry spokesperson Hamdy Abdelaziz, who said the move came after Saudi Aramco decided it would suspend delivery of energy products to the North African country.

Abdelaziz said to Mada Masr that this month’s delivery failure “does not mean that the entire import agreement with Aramco will be canceled, since the halt may be due to technical or logistical reasons, which are normal in all economic agreements.”

The current deal between Aramco and the Egyptian government brings the equivalent of 700,000 barrels of fuel per month to Egypt at a cost of $23 billion for 15 years.

The news site also contacted two different sources from the Saudi company, both of whom chose to remain anonymous.

One of the sources said the halt occurred due to technical reasons, but the agreement will still function normally.

“The agreement is still working and is not subject to any changes. It is purely technical and is related to the latest OPEC meeting held at the end of September,” the source said.

The other source, however, suggested that the decision to halt Egypt’s October petroleum imports had a “political nature.”

“We don’t know the background of the issue and we cannot determine the reason behind it specifically,” the source stated.

Although the issue could be technical and related in some way to the OPEC agreement, Saudi Arabia’s halt of petroleum products to Egypt follows conveniently a spat between the two after Egypt backed separate Russian and French Draft resolutions on Syria at the UN Security Council this last weekend.

Related: Oil Falls As OPEC Production Hits Record In September

In response, Abdallah Al-Mouallimi, Saudi UN ambassador, chastised Egypt for supporting the Russian draft. “It was painful to see that the Senegal and Malaysia positions were closer to the Arab consensus on Syria compared to that of an Arab representative.”

A Washington-based Saudi lobbyist, Salman Al-Ansari, took to Twitter, adding, “Excuse me, Arab Republic of Egypt, but your vote in favor of the Russian draft in the Security Council made me doubt your motherhood of the Arabs and the world''.

The deal with Aramco has saved Egypt millions of dollars per month while it is desperately trying to revive its downbeat economy and narrow its budget deficit—one of the largest in the Middle East. In an attempt to raise cash, Egyptian authorities intend to start their initial public offerings (IPOs) program with state-held oil companies in a plan to raise US$10 billion from listings in three to five years.

By Zainab Calcuttawala for Oilprice.com

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