Iranian oil passing Suez Canal dropped due to Western sanctions

The number of Iranian crude vessels passing through Egypt’s Suez Canal has dropped this year as Western sanctions bite, an official from the Suez Canal Authority said on Tuesday.

“I can say there’s been a 5 to 6 percent drop in Iranian crude … since the first of January,” Sayed Mariee, deputy director of planning, research and studies at Suez Canal Authority told Reuters on the sidelines of an industry event on Tuesday.

He added that Egypt will continue to allow Iranian vessels to use the canal even after July, when the European Union fully moves ahead with an embargo on Iranian crude.

“These sanctions are by Europe and the US, they’re not sanctions from Egypt,” said Mariee. “There’s no discrimination. Iranian tankers pass through Suez, Israeli tankers pass too.”

Asked if Iran was still using the Sumed pipeline connecting the Red Sea to the Mediterranean to transport its oil, Mariee said that it was but was not certain if volumes had dropped.

The 2.3 million bpd Sumed pipeline is filled with 65 percent Saudi crude, 25 percent Iranian and 4 percent Kuwaiti.

This year revenues from the canal — a vital source of foreign currency for Egypt — were expected to slightly increase to US$5.4 billion from $5.3 billion a year ago, said Mariee.

“The problem is not in the container business, but we have some challenges. We have competition from other routes like the Panama Canal and North Sea.”

As a new addition to the business, the authority is looking at expanding its fuel bunkering base.

"But we have a shortage of [fuel]. One alternative is to import from Yanbu [Saudi Arabia]," said Mariee, adding that the plan was to increase bunker quantities from 3 million tons annually to 8 million tons.

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