Saudi Aramco Suspends Egypt’s Oil Shipments Until Further Notice

Saudi Arabian Oil Co. halted shipments of oil products to Egypt indefinitely, Egyptian Oil Minister Tarek El-Molla said, forcing the Arab world’s most populous nation to buy fuels on world markets at higher cost.

The state producer known as Saudi Aramco informed the Egyptian General Petroleum Corp. in early October that it would halt supplies of refined oil products, forcing Egypt to resort to tenders to meet domestic demand. It was not clear at the time if the freeze was only for October. The company had agreed earlier this year to provide Egypt with 700,000 tons of refined oil products a month for five years in an arrangement valued at about $23 billion.

Egypt, which relies on imports to meet its energy needs, is now facing higher costs for gasoline and other oil products after the government decided



on Thursday to allow its currency to trade freely as a step toward stabilizing an economy weakened by a dollar shortage. The Egyptian energy minister confirmed the indefinite suspension of Saudi fuel supplies during a conference in Abu Dhabi on Sunday, without giving reasons.

State-owned EGPC has agreed to buy eight gasoil cargoes for November delivery to Alexandria, at an average price of about $12 a metric ton over regional benchmarks, according to three traders with knowledge of the situation. The country has also signed a memorandum of understanding to import crude oil from the State Oil Co. of the Azerbaijan Republic, known as Socar, to supply its refineries, the oil ministry said Thursday. The deal came after Egypt reached an agreement with Iraq on Oct. 31 to form joint ventures to produce oil and natural gas.