Egypt is sharply increasing its diesel imports, reaching new highs in July as it scrambles to secure backup fuel for power generation amid rising energy demand.
This surge in diesel purchasing is significantly affecting global markets, especially in Europe, where supplies are tightening.
Data from Bloomberg, based on analytics from Vortexa Ltd., shows that Egypt imported over 370,000 barrels of diesel and gasoil daily during the first half of July.
This marks a 65% increase compared to the same period last year and a 35% rise over June’s figures, making it the highest volume recorded since at least 2016.
The increase comes as Israel halted natural gas pipeline deliveries due to territorial conflicts, prompting Egypt to boost diesel imports.
Diesel fuels power plants across Northern Africa, and with Egypt’s domestic gas production sharply reduced and limited LNG import infrastructure, diesel and fuel oil have become more affordable alternatives to ease summer power shortages.
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Most of Egypt’s diesel imports come from the Middle East and Russia, diverting supplies from traditional markets.
Pamela Munger, senior market analyst at Vortexa, explained that barrels are being redirected from northwest Europe to the Mediterranean, increasing competition and putting pressure on European diesel stock levels.
Preliminary forecasts for the rest of July suggest import volumes may remain near these high levels.
However, Munger cautioned that changing market conditions and shipping routes could alter final delivery figures.
She noted, “As we head toward the winter months, diesel could remain tight due to the seasonal refinery maintenance in September, however mitigated somewhat by the declining needs for power generation.”
Bloomberg also reported that diesel prices relative to crude oil, the crack spread, are significantly above usual seasonal levels, resulting in unusually strong refining margins for diesel in Europe.
The US Gulf Coast is supplying barrels to the Amsterdam-Rotterdam-Antwerp hub, adding to the tight diesel market in the Atlantic Basin and supporting crude oil prices.
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Image Credit: AAWSAT
