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Why OPEC’s Decision To Delay Makes Sense

Why OPEC’s Decision To Delay Makes Sense

OPEC’s decision to maintain the…

Saudi Aramco To Restart Shipments To Egypt After 6-Month Hiatus

Oil and Pipeline

Saudi Aramco will restart oil and refined product shipments to Egypt after a sudden halt nearly six months ago, according to an announcement by the Egyptian Petroleum Ministry on Wednesday.

The ministry said it had been working with the oil giant to determine a shipping schedule for the goods, adding that low oil prices and production cuts had caused the shipment freeze in October.

"It was agreed that the Saudi Arabian side would resume Aramco's shipping of oil products as per the commercial contract signed between the Egyptian General Petroleum Corporation and Aramco," the ministry’s statement said.

An anonymous official spoke to Reuters and confirmed that the resumed shipments would begin slowly.

"Very shortly we will finalize the time and place for receiving shipments from Aramco," the official, who declined to be identified because he was not authorized to speak to the media, told Reuters.

When asked whether ships with Saudi oil cargo would dock within weeks, the official said: "No, no, we are talking about a very short time period."

Last April, the KSA agreed to supple Egypt with 700,000 tonnes of refined oil products every month for five years, but shipments stopped just six months later as political tensions grew, Reuters reports.

Related: Saudi Arabia Tries To Reassure Markets After Oil Price Plunge

Saudi Arabia has been a major donor to Egypt since President Abdel Fattah al-Sisi seized power in a violent countercoup in mid-2013, but Riyadh has become frustrated with Sisi's lack of economic reforms and his reluctance to be drawn into the conflict in Yemen. 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 the cargoes stopped arriving in early October as festering political tensions burst into the open.

"They did not give us a reason," an oil ministry official told Reuters in November. "They only informed the authority about halting shipments of petroleum products until further notice."

By Zainab Calcuttawala for Oilprice.com

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