A cluster of mostly Saudi supertankers loaded with oil that has been idling off Egypt’s Red Sea coast for weeks has shown signs of starting to clear as two of the 11 tankers are no longer anchored near the Ain Sukhna oil terminal, according to tanker tracking data compiled by Bloomberg.
As of last Friday, 10 very large crude carriers (VLCCs) carrying around 20 million barrels of oil were floating off Ain Sukhna and another two supertankers were heading to the same location, Vortexa data showed on June 16.
All 10 floating supertankers have been stationary for seven days or more and most of these cargoes loaded during or after the second half of May, Jay Maroo, Head of Market Intelligence & Analysis (MENA) at Vortexa, wrote in a note on Friday.
It wasn’t immediately clear what has caused the accumulation of tankers, while Saudi Arabia hasn’t commented on the build-up of cargoes off Egypt. Most supertankers carrying Saudi Arabian crude typically deliver the oil to Ain Sukhna without transiting the Suez Canal.
The most likely reason is a lack of storage, according to Bloomberg.
Now two of the 11 tankers are no longer anchored, including the Saudi tanker that had been idle off the Egyptian coast for the longest period of time, per the data collected by Bloomberg. Of the 11 tankers, 9 are owned by Bahri, the national shipping carrier of Saudi Arabia, and two by Chinese firms.
At any rate, there haven’t been many recent instances of Saudi crude accumulating in such quantity offshore Egypt, Vortexa’s Maroo said.
“The last time Saudi crude floating storage volumes were above current levels was in Q2 2020 when levels hit 30mbd, but that was amid a wider rise in floating storage volumes and a strong contango structure supporting the activity,” Maroo noted at the end of last week.
The cargo cluster off Egypt’s coast comes weeks before Saudi Arabia is set to begin the unilateral production cut of 1 million barrels per day (bpd) in July.
By Charles Kennedy for Oilprice.com
