(Bloomberg) — Supertankers carrying more than 20 million barrels of Saudi Arabian crude are crowding Egypt’s Red Sea coast, the most since the scale of the global pandemic in 2020, Vortexa data showed.
The reasons for the surge are unclear and it comes at a time when Saudi Arabia has promised to make further production cuts in order to raise prices. Fears of oversupply have gripped markets as investors try to gauge the direction of demand growth, particularly in China.
“The last time floating storage volumes for Saudi crude were above current levels was in the second quarter of 2020,” when levels hit 30 million barrels, “but that happened amid a broader increase in floating storage volumes and a strong contango structure who supported the activity,” said Jay Maroo, Vortexa’s head of market research and analysis for the Middle East and North Africa wrote in a statement on Friday.
A possible explanation for the surge in tankers in the region could be higher demand for Saudi Arabian crude in Europe, the analyst wrote, noting that infrastructure issues do not appear to be the cause.
More details about the ships:
|U-turn in the Indian Ocean after sailing to Japan
|28th of May
Other ships still arrive at Egypt’s Ain Sukhna oil terminal on the Red Sea and unload their cargo with little or no delay.
Ain Sukhna is the starting point of the SUMED pipeline, which leads to a crude oil storage and loading terminal at Sidi Kerir on Egypt’s Mediterranean coast. The facilities are partially owned by several oil-producing countries in the Middle East, including Saudi Arabia, which is the system’s largest user.
Eight of the 10 ships anchored off Ain Sukhna are Saudi-owned, according to ship-tracking data monitored by Bloomberg.
–Assisted by Alex Longley.
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