LONDON: Egypt’s SUMED pipeline operator has approached oil traders to ask if they want to book its system to transport crude oil as a stuck container ship could block the Suez Canal for weeks, three trading sources told Reuters on Thursday.
The 400 meter (430 yard) vessel is blocking transit in both directions through one of the world’s busiest shipping channels for oil and grain and other trade linking Asia and Europe.
Traders have had to replace some empty tankers that were due to head north through the canal to pick up Mediterranean crude. Otherwise, many are gambling that the situation will resolve itself over the next few days.
“Rerouting via the Cape (Africa) could cost about $400,000 extra in freight plus you need to factor in 2-3 weeks of extra travel time,” a shipping source said on condition of anonymity.
“At the moment, it’s not costing charterers any money ... the closure will affect delivery time but there is no demurrage because there is no clause for the Suez being shut.”
Moving oil through SUMED can also be a costly proposition and potentially only attractive to supertankers carrying 2 million barrels, one trader said.
It could cost about 50 cents to $1 per barrel to move the oil through, another trader said, and a change now might still cost the charterer the full freight costs.
SUMED links the Red and Mediterranean Seas with a capacity of over 2.5 million barrels per day. About 1.3 million bpd flowed through the system in 2018, the US Energy Information Administration said.
The pipeline is majority-owned by Egypt’s state oil company EGPC while Saudi Aramco, the Kuwait Investment Authority and Qatar Petroleum have smaller shares.
Egypt’s SUMED oil pipeline approaches traders hit by Suez blockage
https://arab.news/y96j2
Egypt’s SUMED oil pipeline approaches traders hit by Suez blockage
- It could cost about 50 cents to $1 per barrel to move the oil through
- SUMED links the Red and Mediterranean Seas
Closing Bell: Saudi main index closes in red; Nomu gains
RIYADH: Saudi Arabia’s Tadawul All Share Index continued its downward trend on Tuesday, as it shed 34.44 points or 0.33 percent to close at 10,290.76.
The total trading turnover of the benchmark index stood at SR3.57 billion ($950 million), with 80 of the listed stocks advancing and 178 declining.
The Kingdom’s parallel market Nomu advanced by 0.43 percent or 100.66 points to close at 23,327.60.
The MSCI Tadawul Index, however, declined by 0.19 percent to 1,368.49.
The best-performing stock on the main market was Almasane Alkobra Mining Co., as its share price increased by 7.83 percent to SR95.
The share price of Electrical Industries Co. advanced by 6.17 percent to SR11.18.
Saudi Arabian Mining Co., known as Maaden, also saw its stock price climb by 5.74 percent to SR64.50.
Conversely, the share price of Shatirah House Restaurant Co. declined by 8.14 percent to SR8.13.
On the announcements front, Saudi Telecom Co. said that it plans to issue a dollar-denominated international sukuk under its $5 billion International Trust Certificate Issuance program.
According to a Tadawul statement, the issuance program was set up on Jan. 6, following a board approval obtained on Sept. 30.
Stc added that the issuance will be conducted through an offshore special purpose vehicle established outside Saudi Arabia, adding that the proceeds will be used for the company’s general corporate purposes.
The statement further said that the sukuk may be issued in one or more tranches or series by way of an offer to eligible investors in the Kingdom and internationally.
The telecom giant added that the amount and terms of the offer of the sukuk will be determined based on market conditions.
The share price of stc edged down by 1.08 percent to SR42.06.
