Egypt tries crude swaps to import crucial foreign oil

Egypt is offering to swap some of its domestic oil production for Iraqi crude better-suited to its ageing refining system, as Cairo’s budget woes restrict its ability to buy on international markets.

Egypt’s state-owned Egyptian General Petroleum Corp issued a tender to swap a 435,000-450,000 barrel cargo of its Qarun crude oil grade for a similar-sized cargo of Iraqi Basra Light for August delivery, a tender document showed.

The tender closes on July 14 with offers remaining valid until July 21. The tender specifies that the delivery will take place through storage-tank transfer at its oil hub Sidi Kerir on August 16.

Egypt has been largely unable to buy crude oil in the international market for more than a year due to a domestic subsidy scheme which absorbs some 20 per cent of state spending.

One of its major refineries, Midor, on the Mediterranean coast, was struggling to run at even half capacity without Iraqi oil and failed to award processing tenders last year as the economics were not attractive.