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Mysterious Cluster Of Saudi Oil Tankers Off Egypt Raises Storage Concerns

The number of Saudi supertankers carrying oil and sitting offshore Egypt increased again on Friday, according to vessel tracking data monitored by Bloomberg, after signs emerged earlier this week that the previous large cluster had started to clear.  

An unusual cluster of mostly Saudi supertankers loaded with oil has been idling off Egypt’s Red Sea coast since early June. Signs emerged at the end of June that the cluster may have started to clear as two of the 11 tankers were no longer anchored near the Ain Sukhna oil terminal off Egypt.

As of June 16, ten very large crude carriers (VLCCs) carrying around 20 million barrels of oil were floating off Ain Sukhna and another two supertankers were heading to the same location, Vortexa data showed.    

All 10 floating supertankers were stationary for seven days or more and most of these cargoes loaded during or after the second half of May, Jay Maroo, Head of Market Intelligence & Analysis (MENA) at Vortexa, wrote in a note.

It wasn’t immediately clear what has caused the accumulation of tankers, while Saudi Arabia hasn’t commented on the build-up of cargoes off Egypt. Most supertankers carrying Saudi Arabian crude typically deliver the oil to Ain Sukhna without transiting the Suez Canal. 

The most likely reason is a lack of storage, according to Bloomberg.

After some of the cluster had cleared in recent days, the number of supertankers off Ain Sukhna increased again to eight, including six Saudi-owned supertankers carrying around 12 million barrels of oil, the most recent data compiled by Bloomberg showed. The tanker in this group that had arrived the earliest has been floating for three weeks now, per Bloomberg’s estimates. 

Around 10.5 million barrels of Saudi crude are currently sitting in floating storage off Ain Sukhna, half compared to the middle of June, Reuters reported on Friday, quoting Vortexa. Five Saudi tankers off Egypt are currently considered floating storage, while two other vessels loaded with around 4 million barrels of Saudi crude are also waiting but do not technically count as floating storage yet, Vortexa’s Maroo told Reuters.  

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By MIchael Kern for Oilprice.com

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