Russia Finds a New Route to Oil Market Via a Tiny Egyptian Port
In light of impending western sanctions against Moscow, Russia appears to have discovered a new method of distributing its oil. Early on July 24, a shipment of roughly 700,000 barrels of Russian oil was delivered to Egypt's El Hamra oil port on the country's Mediterranean coast.
According to vessel-tracking data tracked by Bloomberg, a different vessel picked up a shipment from the port a few hours later that might have included part or all of the Russian barrels. The unusual action complicates the cargo's final destination, which contributes to a pattern of Russian oil shipments being more veiled since European consumers started to avoid them after the country's invasion of Ukraine.
A single buoy mooring facility is available for loading and unloading at El Hamra, which is run by Egypt's Western Desert Operating Petroleum Co. El Hamra has six storage tanks with a capacity to contain 1.5 million barrels of petroleum.
The terminal was designed to process oil extracted from Egypt's western desert, opening the door to the possibility of blending Russian barrels with local supplies. Numerous phone calls made to the terminal's owner at El Hamra went unanswered.
A second tanker, the Chris, arrived a short while after the Crested, the first one, left El Hamra. The tracking information reveals that even though it had been at the terminal for a few days already, it moved off the mooring to make room for Crested to dock.
The monitoring information reveals that Chris' cargo tanks were nearly full when it finally departed El Hamra on July 28. On Egypt's Red Sea coast, it is currently anchored near the Ras Shukheir oil facility. There are options to mix Russian crude with Egyptian barrels at this facility as well.
Russia currently uses Egypt as a fuel oil transit country. It's uncertain whether El Hamra will continue to be a unique port for Russian oil shipments or if it will expand.
Tankers transporting Russian oil have in the past exchanged cargo between ships off the coast of Ceuta, a Spanish city in North Africa, and more recently in the middle of the Atlantic. For such a challenging operation, which is often carried out in protected near-shore settings, that is an odd position.
Off Johor, close to Singapore, there seems to have been another transfer of petroleum cargo in June. The region has already developed into a hub for the transshipment of Iranian crude oil destined for China.
Later this year, the European Union will impose a ban on oil exports from Moscow as well as on the provision of insurance and other shipping services. This will increase the pressure on Russia to find and test new maritime routes for its goods.