The Suez Canal Authority (SCA) has denied that the reopening of the Eilat-Ashkelon pipeline would have an impact on flows through the Egyptian waterway.
The resumption of flows through the Israeli link might reduce oil cargoes moving north through the Suez by 12-16%, the SCA said. This would reduce total trade movement through the canal by only 0.61%.
Israel signed a deal in October 2020 with the United Arab Emirates, establishing diplomatic and commercial relations. As part of these accords, the Europe-Asia Pipeline Co. (EAPC) signed a memorandum of understanding (MoU) with MED-RED.
EAPC said the deal would lead to the creation of a “land bridge” between the Mediterranean and the Red Sea. The agreement laid the grounds for oil and products to be transported and stored.
The SCA said oil from the UAE represents only 0.7% of volumes transiting the canal. Saudi Arabia accounts for 4.9% and Kuwait 1.4%.
Furthermore, the authority noted that product volumes were rising through the canal, to 14.2%, while oil had fallen to 9.8% of trade.
Furthermore, the SCA said shipping by Eilat-Ashkelon would involve higher costs and additional time, given the need for loading and unloading of cargoes.
Container ships make up 50% of the SCA’s revenues, while dry bulk is 17% and car carriers 4%. Petroleum products account for 12%, LNG 5% and crude oil 6.4%. The remainder comes from other types of ships, the SCA said.
People should be wary of “false news and misleading information”, the SCA continued.
The Eilat-Ashkelon Pipeline Co. carried out work on the pipeline in 2003 allowing to flow in either direction. EAPC took control of the link in 2019. Pipeline use has fallen in recent years.