By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
DailynewsegyptDailynewsegypt
  • Home
  • Business
    BusinessShow More
    Opinion| Will the BRICS group give a lifeline to the Global South against the dominance of the US dollar?
    Opinion| Will the BRICS group give a lifeline to the Global South against the dominance of the US dollar?
    June 8, 2023
    AUR Capital concludes second securitized bond issuance of EGP 1.124bn 
    AUR Capital concludes second securitized bond issuance of EGP 1.124bn 
    June 8, 2023
    Matouk Bassiouny & Hennawy consults on more than 18 deals currently: Founding partner
    Matouk Bassiouny & Hennawy consults on more than 18 deals currently: Founding partner
    June 8, 2023
    Egypt’s petrochemicals exports surge 23% to $8.629bn in 2022
    Egypt’s petrochemicals exports surge 23% to $8.629bn in 2022
    June 8, 2023
    Trade exchange between Egypt, COMESA countries increases to $5.3bn in 2022: CAPMAS
    Trade exchange between Egypt, COMESA countries increases to $5.3bn in 2022: CAPMAS
    June 8, 2023
  • Politics
    PoliticsShow More
    Opinion| The suspension of Russia's participation in the START Treaty portends an imminent nuclear war
    Opinion| The suspension of Russia’s participation in the START Treaty portends an imminent nuclear war
    June 8, 2023
    Israel's neglect of Palestinian issue threatens regional, global security: Palestinian Foreign Ministry
    Israel’s neglect of Palestinian issue threatens regional, global security: Palestinian Foreign Ministry
    June 8, 2023
    Renewed clashes erupt in Sudan’s Omdurman, Khartoum
    Renewed clashes erupt in Sudan’s Omdurman, Khartoum
    June 8, 2023
    Abdel Ghaffar highlights Egypt’s government achievements in health sector during Africa Health ExCon
    Abdel Ghaffar highlights Egypt’s government achievements in health sector during Africa Health ExCon 
    June 8, 2023
    A legally binding agreement must be reached on GERD: Al-Sisi
    A legally binding agreement must be reached on GERD: Al-Sisi
    June 8, 2023
  • Interviews
    InterviewsShow More
    EFG Finance to launch unified platform gathering all its financing services: Alaa Al-Afifi
    EFG Finance to launch unified platform gathering all its financing services: Alaa Al-Afifi
    May 31, 2023
    I changed my artistic path to create ‘state of wonder’: Tarek Lotfi
    I changed my artistic path to create ‘state of wonder’: Tarek Lotfi
    May 25, 2023
    I adore Ramadan drama, ‘Telt Al-Talata’ series achieved great success: Ghada Abdel Razek
    I adore Ramadan drama, ‘Telt Al-Talata’ series achieved great success: Ghada Abdel Razek
    May 8, 2023
    We aim to establish Egypt as nearshore centre for Software AG for MET region: Rami Kichli
    We aim to establish Egypt as nearshore centre for Software AG for MET region: Rami Kichli
    April 29, 2023
    Egypt-Spain relations witness remarkable development in recent years: Spanish ambassador in Cairo
    Egypt-Spain relations witness remarkable development in recent years: Spanish ambassador in Cairo
    April 18, 2023
  • Culture
  • Opinion
  • Sports
  • Lifestyle
Reading: How a fluctuating oil market is likely to impact Egypt
Share
Notification
Latest News
Egyptian drama and cinema industry: challenges and solutions
Egyptian drama and cinema industry: challenges and solutions
Cinema Culture
Opinion| The suspension of Russia's participation in the START Treaty portends an imminent nuclear war
Opinion| The suspension of Russia’s participation in the START Treaty portends an imminent nuclear war
Opinion Politics
Opinion| Will the BRICS group give a lifeline to the Global South against the dominance of the US dollar?
Opinion| Will the BRICS group give a lifeline to the Global South against the dominance of the US dollar?
Opinion Business
AI outperforms standard risk model for predicting breast cancer
AI outperforms standard risk model for predicting breast cancer
Science
AUR Capital concludes second securitized bond issuance of EGP 1.124bn 
AUR Capital concludes second securitized bond issuance of EGP 1.124bn 
Business
Aa
Aa
DailynewsegyptDailynewsegypt
  • Home
  • Business
  • Politics
  • Interviews
  • Culture
  • Opinion
  • Sports
  • Lifestyle
  • Home
  • Business
  • Politics
  • Interviews
  • Culture
  • Opinion
  • Sports
  • Lifestyle
Have an existing account? Sign In
Follow US
  • Advertise
© 2023 DNE News. All Rights Reserved.
Dailynewsegypt > Blog > Business > Energy > How a fluctuating oil market is likely to impact Egypt
Energy

How a fluctuating oil market is likely to impact Egypt

Daily News Egypt
Last updated: 2016/12/24 at 7:24 PM
By Daily News Egypt 4 Min Read
Share
OPEC
SHARE

The oil market has been in decline for a considerable period of time, having experienced three consecutive years during which supply has outstripped demand. This has continued to drive prices down and created a depreciating marketplace, while forcing the intergovernmental Organisation of the Petroleum Exporting Countries (OPEC) to take decisive action.

After initially brokering a deal through which member nations agreed to reduce their output to 1.2m barrels per day (bpd), the group has since met with non-OPEC oil producers to initiate further coordinated cuts. The two deals are contingent on one another, with non-member countries expected to agree to a production cap in the region of 600,000 bpd.

Will the cap work and what does it mean for Egypt?

The prospect of this meeting and the initial deal brokered with OPEC nations initially sent prices soaring by 15%, despite suggestions that Iran may be loathed to agree to such a cut. This initial boon has subsequently subsided, amid data which suggests that rising production levels have been reported in Iran and prominent, non-OPEC countries like Russia.

Even though the majority of countries now appear to be in agreement with OPEC’s proposal, there are several potential pitfalls including political issues and the non-participation of certain nations, including Kazakhstan and Brazil—both of which plan to increase production in 2017.

Interestingly, Egypt may also suffer adversely as a result of the cap. This is despite the fact that, as a non-OPEC, oil producing nation, the populous North African region only generates an estimated 600,000 bpd day and would find it easy to comply with the new restrictions. Its large population means that the government often has to rely on subsidies from OPEC neighbours, such as Saudi Arabia, and these may not be easy to come across under the terms of the new agreement.

There are also political issues, as the Saudi government are in a position in which they are able to determine precisely how they scale down their production. So, while they are likely to dramatically reduce output to high volume outlets such as the United States, they will also continue to restrict their shipments to Egypt as a result of an ongoing political dispute and concerns over a perceived lack of economic reforms within the region. November even saw the Saudis temporarily halt oil shipments as part of a previously agreed  $23bn aid deal as the gap between the two regions grew substantially wider.

The bottom line

Not only has the lack of oil supply constrained the marketplace and created challenges for contract for difference traders in particular, but it has also put Egypt at risk of a potential oil shortfall. With the absence of political reform in the region and a global supply cap further reducing the amount of oil that can be shipped from prolific partners such as Saudi Arabia, Egypt may be forced to redistribute its own resources or seek a supply from elsewhere. This may have an impact on the nation’s GDP and economic stability, so the nation will be hopeful that oil prices increase soon in the absence of a viable agreement with the Saudis.

 

You Might Also Like

Iranian president warns of Western bids to cause division among OPEC members

Environment Minister meets with waste-to-energy investors 

Madbouly witnesses signing of $680m financial close agreement for 500MW Gulf of Suez wind farm

Egypt-Saudi Arabia trade exchange increases to $10.3bn in 2022: CAPMAS

Egypt sends commercial mission including 33 exporting companies to Saudi Arabia

TAGGED: oil market, OPEC, saudi arabia
Share this Article
Facebook Twitter Email Print
Previous Article Could the visit of Libya’s National Oil Corporation chairperson to Cairo solve Egypt’s oil imports challenge?
Next Article 10 banks offer EGP 6bn syndicated loan to Etisalat Egypt
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Ad image
Ad image

Stay Connected

Facebook Like
Twitter Follow
Instagram Follow
Youtube Subscribe

Latest News

Egyptian drama and cinema industry: challenges and solutions
Egyptian drama and cinema industry: challenges and solutions
Cinema Culture
Opinion| The suspension of Russia's participation in the START Treaty portends an imminent nuclear war
Opinion| The suspension of Russia’s participation in the START Treaty portends an imminent nuclear war
Opinion Politics
Opinion| Will the BRICS group give a lifeline to the Global South against the dominance of the US dollar?
Opinion| Will the BRICS group give a lifeline to the Global South against the dominance of the US dollar?
Opinion Business
AI outperforms standard risk model for predicting breast cancer
AI outperforms standard risk model for predicting breast cancer
Science
//
Egypt’s only independent daily newspaper in English. Discuss the country’s latest with the paper’s reporters, editors, and other readers.

Quick Link

  • Home
  • Business
  • Politics
  • Interviews
  • Culture
  • Opinion
  • Sports
  • Lifestyle

Sign Up for Our Newsletter

Subscribe to our newsletter to get our newest articles instantly!

© 2023 DNE News. All Rights Reserved.

Join Us!

Subscribe to our newsletter and never miss our latest news, podcasts etc..

Zero spam, Unsubscribe at any time.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?