Egypt takes measures to protect against unstable oil prices

Egypt’s Cabinet announced that it has approved the signing of contracts with international banks and financing institutions as a precautionary measure to ensure protection against the risk of oil price fluctuations, the Anadolu Agency reported.

Egypt’s public budget estimates the price of oil to drop to $67 per barrel for the year 2018/2019 while the current price of Brent crude is $74 per barrel.

The insurance covers Egypt’s oil exports as well as local production to cover the market’s needs.

The Egyptian budget’s financial year starts in July and ends in June of the following year.

Read: Egypt signs 3 oil, gas exploration deals

Crude oil prices have sharply fluctuated between 2015 and 2018 with Brent crude recording $26 per barrel in early 2016 before rebounding, although it is still lower than its mid-2014 record price of $120.

In a related context, in line with President Abdel Fattah Al-Sisi’s decision, Egypt’s Cabinet Council approved an agreement with Russia on the establishment of a Russian industrial zone in the Suez Canal Economic Zone.

#SisiEra

Last May Egypt’s then-Minister of Trade and Industry Tarek Kabil announced that the country’s agreement with Russia to establish the Russian industrial zone extends for 50 years. He did not specify when work will start in the area.

The Russian industrial zone is set to be built on an area of 5.25 million square metres. It is expected to attract $7 billion in investments.