Egypt offers Red Sea oil storage during Hormuz crisis
- Surplus storage capacity for rent
- Alternative route while conflict continues
- Saudi Aramco using Red Sea port
Egypt is hoping to lease out 10 oil storage facilities at the Red Sea ports of Ain Sokhna and Ras Badran while disruption in the Strait of Hormuz continues due to the Iran conflict.
The government is targeting international oil trading, transport and storage companies to use Cairo’s surplus storage capacity, estimated at 29 million barrels at its main ports, Asharq Business reported, quoting two unidentified state officials.
The storage may be leased on a monthly or annual basis, depending on the offers submitted. No monthly and annual lease rates were given.
The Red Sea is emerging as an alternative energy transit route amid the almost total shutdown of shipping in the Strait of Hormuz, which accounts for a quarter of the world’s seaborne oil trade and a fifth of liquefied natural gas (LNG) supplies.
Saudi Aramco has temporarily diverted crude oil shipments to the Red Sea port of Yanbu to ensure continued supplies to its customers.
Last October, Cairo signed an agreement with the government of Fujairah, one of the seven emirates of the UAE, to develop the Al Hamra Petroleum Port on the Mediterranean Sea.
Oil prices have risen to their highest since July 2022, surging on Monday morning as the war forced Middle Eastern producers to halt or reduce production after the Strait of Hormuz was effectively closed.
Brent crude contracts rose to $114.43 per barrel, while West Texas Intermediate traded around $110.40, after both rose above $90 a barrel at Friday’s close of trading.
More news on the Iran conflict
- The Hormuz bottleneck: something’s got to give
- Aramco shares rise against background of Iran conflict
- South Korea and India log energy impact of Iran conflict
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