Saudi Arabia has informed Egypt that shipments of oil products expected under a $23 billion aid deal have been halted indefinitely.
Saudi Arabia has been a major donor to Egypt since President Abdel Fattah Al-Sisi seized power in mid-2013 but Riyadh has become frustrated with Al-Sisi’s lack of economic reforms and his backing of Russia during UN votes on Syria.
During a visit by Saudi King Salman in April, the kingdom agreed to provide Egypt with 700,000 tonnes of refined oil products per month for five years but the cargoes stopped arriving in early October as festering political tensions burst into the open.
Egyptian officials have said since that the contract with Saudi Arabia’s state oil firm Aramco remains valid and had appeared to expect that oil would start flowing again soon.
Yesterday, however, Egyptian Oil Minister Tarek El Molla confirmed Aramco had stopped shipments indefinitely. The Saudi firm has not commented on the halt and did not respond to calls.
“They did not give us a reason,” an oil ministry official told Reuters. “They only informed the authority about halting shipments of petroleum products until further notice.”
The move comes as a source in Molla’s delegation said late on Sunday evening that he would visit Iran, Saudi Arabia’s main political rival, to try to strike new oil deals.
Speaking to reporters in Abu Dhabi, Molla said he was not going to Iran. An Iranian oil official later said that a report by the semi-official Mehr news agency suggesting Molla would meet his Iranian counterpart in Tehran yesterday was “incorrect”.
Egyptian Prime Minister Sherif Ismail also said Molla was not visiting Iran and Egypt was not negotiating with Tehran over importing oil products, state newspaper Al-Ahram reported.
But two security sources and the source in Molla’s delegation said the minister had been scheduled to go, and the low-key visit was now delayed after the news became public.