Saudi Aramco halts oil supplies to Egypt

According to media reports, Egyptian Oil Minister Tarek El-Molla stated that the state producer Saudi Arabian Oil Co. known as Saudi Aramco halted shipments of oil products to Egypt indefinitely, which will drive the country to buy oil from other countries at higher prices. Saudi Aramco had said in October that it would suspend refined oil products’ supplies to the Egyptian General Petroleum Corp, but at the time it was not clear for how long the suspension would last.

According to an agreement worth $23 billion which had been previously signed between the two countries, Saudi Arabia was expected to provide 700,000 tons of refined products per month to Egypt for the next five years.

Egypt’s economy depends on imports and now it will face higher prices for oil products to meet the energy needs of the country. A market analyst commented that halting the supply of oil products puts Egypt in a difficult position, particularly after the country’s Central Bank decided to allow the local currency to float freely.