Supertankers holding more than 20 million barrels of Saudi Arabian crude are clustered off Egypt’s Red Sea coast, the most since the depths of the worldwide pandemic in 2020, data from Vortexa showed.
(Bloomberg) — Supertankers holding more than 20 million barrels of Saudi Arabian crude are clustered off Egypt’s Red Sea coast, the most since the depths of the worldwide pandemic in 2020, data from Vortexa showed.
The reasons behind the buildup are unclear and it comes at a time when Saudi Arabia has vowed to make additional production cuts in an attempt to lift prices. Fears about a supply glut have gripped the markets as investors try to gauge the direction of demand growth, particularly in China.
“The last time Saudi crude floating storage volumes were above current levels was in Q2 2020” when levels hit 30 million barrels “but that was amid a wider rise in floating storage volumes and a strong contango structure supporting the activity,” Jay Maroo, Vortexa’s head of market intelligence and analysis for the Mideast and North Africa, wrote in a note on Friday.
One likely explanation for the rise in tankers in the area could be due to higher demand for Saudi crude in Europe, the analyst wrote, noting that infrastructure issues don’t seem to be the culprit.
For more details on the vessels:
Other vessels are still arriving at Egypt’s Red Sea oil terminal of Ain Sukhna and discharging cargoes with little or no delay.
Ain Sukhna is the starting point for the SUMED pipeline, which runs to a crude storage and loading terminal at Sidi Kerir on Egypt’s Mediterranean coast. The facilities are part-owned by several Middle Eastern oil producing countries, including Saudi Arabia, which is the biggest user of the system.
Eight of the 10 ships anchored off Ain Sukhna are Saudi-owned, according to vessel tracking data monitored by Bloomberg.
–With assistance from Alex Longley.
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