Saudi Arabia’s state-owned energy giant Saudi Aramco suspended deliveries of oil products to Egypt for undefined period, which forced the country to buy fuel from other sources at a higher price. Saudi Aramco has informed Egyptian General Petroleum Corporation in early October that it would stop the supply of refined petroleum products, forcing the authorities in Cairo to start auctions to satisfy domestic demand. It is not clear whether the freezing of supply is valid for October or will continue until further negotiations. The company earlier this year agreed to supply Egypt 700,000 tons of refined oil products per month within five years, at a deal estimated at around 23 billion USD
Egypt, which relies on imports to meet its energy demands, is now facing higher prices for gasoline and other petroleum products after last week the local authorities decided to allow free floating exchange rate in an attempt to stabilize the economy, weakened by shortage of dollars, as well as receive access to billion dollar financial aid programs of IMF.
The Egyptian Energy Minister confirmed at a conference in Abu Dhabi on Sunday that Saudi oil supplies have been suspended indefinitely, but did not disclosing more details.
According to the economists and analysts, the state company EGPC has agreed to buy diesel fuel for heating in November, at average price of 12 USD per metric ton over regional benchmark values.
Moreover, the authorities in Cairo have signed a memorandum of agreement for the import of crude oil from Azerbaijan’s state-owned State Oil Co. The deal comes after another agreement by the end of November with Iraq to form joint ventures for production of oil and natural gas.
more recommended stories
Macy’s Assets Continue to be Overlooked
This is no time to be.
Global Asset Prices Move in Lock-Step
Portfolio managers often preach the benefits.
Buffett Doubles Apple Stake, Adds to Airlines
The Securities and Exchange Commission (SEC).
CBOE Volatility Index Hits New Lows
After a year of surprises that.