• 5 minutes Rage Without Proof: Maduro Accuses U.S. Official Of Plotting Venezuela Invasion
  • 11 minutes IEA Sees Global Oil Supply Tightening More Quickly In 2019
  • 14 minutes Paris Is Burning Over Climate Change Taxes -- Is America Next?
  • 2 hours Alberta govt to construct another WCS processing refinery
  • 2 hours U.S. Senate Advances Resolution To End Military Support For Saudis In Yemen
  • 59 mins What Can Bring Oil Down to $20?
  • 1 min Let's Just Block the Sun, Shall We?
  • 3 hours OPEC Cuts Deep to Save Cartel
  • 7 hours Regular Gas dropped to $2.21 per gallon today
  • 9 hours Venezuela continues to sink in misery
  • 7 hours $867 billion farm bill passed
  • 1 day Sane Take on the Russia-Ukraine Case
  • 2 days Waste-to-Energy Chugging Along
  • 1 day Sleeping Hydrocarbon Giant
  • 11 hours Contradictory: Euro Zone Takes Step To Deeper Integration, Key Issues Unresolved
  • 5 hours Global Economy-Bad Days Are coming
  • 11 hours WTO So Set Up Panels To Rule On U.S. Tariff Disputes

EGYPT: Political, Economic Uncertainty Fueled by Fuel

Bottom Line: As Egypt’s political uncertainty soars unabated, two major oil supply deals with Iraq and Libya are falling through without the financing guarantees, while energy shortages threaten to lend greater impetus to the prevailing unrest.

Analysis: Egypt is cash-strapped and its only hope of securing agreed-on oil supplies from Iraq and Libya are being dashed as the government fails to come up with the necessary bank guarantees. In March, Libya agreed to give Egypt 1 million barrels of crude a month for up to a year on soft credit terms, while Iraq offered up 4 million barrels of crude per month (at over $100/barrel) with no-interest, deferred payments for three months. However, shortly after agreeing to the deal, Iraq asked for a down payment (about $1.2 billion) or a same-value bank guarantee, which destitute Egypt can’t come up with. The Iraqi government rejected a letter of credit from Egypt Central Bank guaranteeing the $1.2 billion. Libya is likewise looking for a guarantee for liabilities that Egypt hasn’t materialized.

Recommendation: Egypt’s diesel shortage has been fueling continued unrest since last year, and it is having the snowball effect of leading to rising food costs and increasingly frequent blackouts. It will be this in the end that is the undoing of a government that is only hanging on by a threat.

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions




Oilprice - The No. 1 Source for Oil & Energy News