Egypt will receive two million barrels of crude oil from Iraq by mid May, reported the state-run Ahram online.
The expected first shipment is part of a deal with Iraq’s state oil marketing company SOMO, according to the same source.
In light of an agreement reached last month between Baghdad and Cairo, Iraq will sell 12 million barrels of oil to Egypt, Egypt’s Oil Minister Tarek El-Molla was quoted as saying by the official website.
Cairo has struggled to procure oil and natural gas for its domestic market needs from several sources in recent years.
However, recent surges in natural gas discoveries and projected finds in the country promise to help Egypt cut down on its liquefied natural gas (LNG) imports in the coming year.
Egypt, the world’s eighth largest importer of LNG, has discussed deferring contracted shipments this year with its LNG suppliers to reduce purchases in 2018 and attain self-sufficiency in the alternative fuel source by the end of 2018.
This deal has become the first one between the countries mostly due to exacerbation of relations with Saudi Arabia.
To recap, Saudi Arabian Oil Co. halted shipments of oil products to Egypt indefinitely, 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 suspend supplies of refined oil products, leaving Egypt little choice but to resort to tenders for meeting local demand. It wasn’t clear at the time if the freeze was only for October. Aramco had agreed earlier this year to provide Egypt with 700,000 metric tons of refined products each month for five years in an arrangement valued at about $23 billion.
Egypt, which relies on imports to meet its energy needs, faces 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. El-Molla, the Egyptian oil minister, confirmed the indefinite suspension of Saudi fuel supplies on Sunday during a conference in Abu Dhabi, without giving reasons.