• Egypt offers oil storage facilities on the Red Sea to international companies as disruptions halt traffic through the Strait of Hormuz.
• The SUMED pipeline allows crude to move from the Red Sea to the Mediterranean, bypassing the Suez Canal route.
• Oil prices surged sharply, with Brent rising to about $117 per barrel, reflecting fears of a major supply shock.

Authorities in Cairo are attempting to position Egypt as an alternative export hub for Gulf crude as tensions disrupt traffic through the Strait of Hormuz. Military escalation involving Iran, the United States and Israel has triggered a major shock in global oil markets.

As a result, shipping through the strategic corridor has slowed dramatically. In response, Egyptian authorities have offered international oil companies the opportunity to rent about ten oil storage facilities located along the Red Sea.

Egypt aims to attract oil cargoes originating from major Gulf producers. Officials expect shipments from Saudi Arabia, Kuwait, Iraq and Qatar, whose exports currently face severe disruption due to the deteriorating security situation in the Gulf region. At the same time, Egypt has highlighted one of its key logistical assets: the SUMED Pipeline.

The infrastructure connects the oil terminal of Ain Sokhna on the Red Sea to the Mediterranean port of Sidi Kerir.

This pipeline allows crude that arrives through the Red Sea to reach European and Mediterranean markets without systematically passing through the Suez Canal.

The strategy comes as global oil trade faces major disruption. The Strait of Hormuz normally handles close to 20% of global oil consumption flows.

However, the ongoing conflict has effectively paralyzed the corridor. Gulf producers have already begun adjusting their logistics routes.

Saudi Arabia, the world’s largest crude exporter, has redirected part of its exports toward the Red Sea using domestic pipelines and has increased shipments from the port of Yanbu.

At the same time, the kingdom has offered several million barrels of crude on the spot market. This unusual move reflects the difficulty of moving certain volumes under current conditions.

Impact on Oil Prices

These disruptions have sharply pushed oil prices higher. At the opening of the Asian trading session on Monday, March 9, the global benchmark Brent Crude climbed to about $117 per barrel.

The surge represented a daily gain of roughly 27%, the strongest increase since the late 1980s. The U.S. benchmark West Texas Intermediate also followed a similar trajectory and surpassed $116 per barrel.

Analysts attribute the price spike to fears of a major supply disruption. Several analysts say the crisis could trigger the most significant oil supply shock since the 1970s oil crises if disruptions in the Gulf continue.

For Egypt, the situation creates both economic and strategic opportunities. Rental income from storage facilities and expanded use of the SUMED Pipeline could generate additional revenue.

At the same time, the strategy supports Egypt’s ambition to establish itself as a regional energy hub. The country has already advanced this ambition in the natural gas sector in the Eastern Mediterranean. However, the scale of Egypt’s role will depend on how tensions in the Middle East evolve.

If disruptions in the Strait of Hormuz persist, alternative routes through the Red Sea and the Mediterranean could gain increasing importance in global oil trade.

Olivier de Souza