Egypt reduced oil purchases, making a bit on LNG

Egypt has refused to purchase more than 2 million barrels of oil, revising import plans amid a temporary suspension of gas supplies from Israel. Instead, the country has increased purchases of liquefied natural gas (LNG).

The state oil company EGPC canceled about half of the 14 previously planned shipments of fuel oil – about 350 thousand tons, or 2.2 million barrels. The company also asks traders to postpone the delivery dates for previously concluded contracts.

The increase in LNG imports was made possible by the construction of two new floating terminals. Egypt buys gas from major traders such as Trafigura and Vitol to cover the growing population's electricity needs. Although fuel oil is also used for generation, difficulties with logistics and port infrastructure limit its supply.

After a sharp increase in imports in July, Egypt plans to review the schedule of LNG purchases in August. The decline in domestic production has made the country a net importer of gas, although until recently it exported its own surplus.