A recent report by SRM Study and Research Centre for Southern Italy has indicated that the freight traffic through the Suez Canal is at record levels and will be boosted still further by the waterway’s strategic role in China’s Belt and Road Initiative (BRI).

The report noted that 2018 saw both a record number of transiting ships (more than 18,000) and cargo throughput (983 million tonnes).

According to SRM, the development of the BRI has made China one of the main areas of origin and destination for cargo passing through the Canal. ‘There are 113 countries in some way involved in this project, almost 50 more than those that originally were part of it,’ said SRM.

Despite the growth in traffic through the Canal, however, the Egyptian bunker market has contracted significantly since its heyday in the early 2000s, when annual volumes were more than three million metric tonnes (mt) a year. Volumes dwindled over the course of the following decade to a little over one million mt and then dropped off alarmingly in the wake of the 2011 crisis. Egypt’s bunker demand was reportedly still only 300,000 mt in 2016, although it has crept up a bit since then.

The Egyptian Government, the Suez Canal Authority (SCA) and the state-owned Egyptian General Petroleum Corporation (EGPC) have indicated that they are now placing more emphasis on bunkering and there are hopes that the increases in Canal traffic will bring back more demand. On the supply side of the equation, EGPC and its bunkering subsidiaries have indicated that they plan to provide more competitively priced fuel.

There was encouraging news last week, when Saudi Aramco’s trading arm, Aramco Trading Company (ATC), signed a deal with Egypt’s SUMED to provide 222,000 cubic metres (cbm) of gasoil storage capacity in Sidi Kerir.

The companies also signed an agreement regarding 165,000 cbm of fuel oil storage capacity in the Red Sea port of Ain Sokhna. This deal may include re-exporting and supplying fuel oil to power plants in Saudi Arabia, as well as meeting the needs of the Egyptian market and ‘providing fuel to ships in the region’.