In a recent statement to Bloomberg, Egyptian Finance Minister Mohamed Maait revealed that, taking place during the current fiscal year, Egypt has hedged its oil supply. While not disclosing further details, the minister did note that Egypt’s imports total about 150 million barrels of oil a year.
As one of the few countries to do so, Egypt engages directly in the oil derivatives market to lock in supplies, wrote Bloomberg. These are closely watched by options traders and dealers as they can make the governments involved significant market players, the news site explained.
Earlier this month, an unnamed government official was cited by Asharq Business who revealed that Egypt purchased hedging contracts covering 35 percent of its estimated oil imports for fiscal year 2023/2024 against the risks of rising global oil prices.
According to the source, contracts locked in crude purchases at around $75-80 per barrel. The government previously estimated a $85 per barrel price, expecting Egypt to import around 100 million barrels during 2023.
Since the end of June, the price of Brent crude has surged more than 20 percent caused by OPEC+ announcing production cuts and rising demand in Asia.
Egypt continues to work on positioning itself as a regional energy hub, accelerating efforts to increase its production of petroleum resources and planned investments. On Monday, Petroleum and Mineral Resources Minister, Tarek El Molla, revealed that Egypt has boosted targeted investments in the petroleum sector to $8.5-9 billion for FY2023/2024.