Egypt intends to establish  a global logistics zone for petroleum products on the Mediterranean Sea

The Egyptian government intends to establish an integrated logistics zone for the handling and storage of petroleum products at the port of Alexandria on the Mediterranean Sea, with an initial investment exceeding $600 million.

According to government officials who spoke to Al-Sharq newspaper, the project will be built on an area of 300,000 square meters, and includes a 900-meter-long jetty as part of the first phase of the development of the "Great Port of Alexandria."

The Ministries of Transport and Petroleum are currently finalizing the contracts for the project, which will determine the structure of the partnerships and usufruct rights, in preparation for the official announcement in the near future.

The Red Sea as an Alternative Route Amid Hormuz Tensions

This step comes in conjunction with Egypt's offering of 10 warehouses for the storage of crude oil and petroleum products for lease at the ports of Ain Sokhna and Ras Badran on the Red Sea. This step acquires utmost strategic importance in light of:

Navigation in the Strait of Hormuz has come to a halt: Due to the Iranian war, making the Red Sea the safest alternative corridor for global energy flows.

Storage capacity: Egypt has a surplus capacity estimated at 29 million barrels in its main ports, which it seeks to lease to international trade and transport companies on a monthly or annual basis.

Global Alert to Supply Disruptions

Egypt's move comes at a time when the global energy market is facing unprecedented threats, with officials warning that the continuation of the war could push oil prices towards the $150 barrier per barrel.

Tensions have led QatarEnergy to suspend operations at major LNG export facilities following drone attacks, while Saudi Aramco temporarily reorganized its shipments through the port of Yanbu to ensure continuity of supplies away from the Persian Gulf.

Infrastructure and Integration of Efforts

Between 2014 and 2023, Egypt developed about 79 oil reservoirs at a cost of EGP 2.35 billion, as part of its plan to become a regional hub for energy trade.

The government has also strengthened its partnerships with regional powers such as the Emirate of Fujairah to develop the Al Hamra Petroleum Port and bring the latest warehousing and logistics technologies to the Egyptian market.