Egypt's Oil Corridor Under Fire as Saudi Arabia's Refinery Suffers Damage

Saudi Arabia's oil refinery was damaged over the weekend, leading Aramco to rely more heavily on Egypt's Sidi Kerir terminal for crude transport. This move is a test of Egypt's ability to maintain its status as an important oil corridor in the region.

Meanwhile, two partners from the Tamar gas field have signed a non-binding memorandum of understanding (MoU) with Egypt, which would be the third long-term gas supply agreement for the field. This agreement is significant because it would allow the gas to flow through Egyptian terminals, further solidifying Egypt's position as a crucial gateway in the region.

According to industry sources, Asian and European buyers are seeking lower prices and stronger supply assurances from Emirati and Qatari LNG suppliers due to continued disruption through Hormuz. This has led to a shift in bargaining power towards buyers, who are now asking for commitments to provide replacement cargoes if shipments through Hormuz are disrupted.

Opec+ is expected to approve another output-target hike at its meeting on August 2, which would be similar to the previous hikes in June and July. However, the cartel's actual production levels have been lower than expected due to disruptions in Hormuz and other areas.