Egypt buys 6 shipments of fuel oil amid the rise in liquefied gas prices

Official data issued on Friday showed that Japan's imports of crude oil decreased by 17.7 percent in September compared to the same period last year, affected by the sharp decline in supplies, as tankers are forced to take a longer route to avoid the Red Sea in light of the escalation of attacks launched by the Yemeni Houthi group allied with Iran.

The Ministry of Economy, Trade and Industry said that imports decreased to 1.94 million barrels per day, marking the first annual decline in four months.

Imports from the Middle East fell 40.5 percent year-on-year during the month.

The Minister of Economy, Trade and Industry, Ryusei Akazawa, warned in August that Japan's oil imports in September would decline, after tankers that normally pass through the Bab al-Mandeb Strait were rerouted to take the longer Suez route.

It takes about 55 days for shipments to reach Japan via the Suez Road, compared to between 21 and 23 days via the Bab al-Mandab Strait, which is a major strategic corridor.

Saudi Arabia was among the largest suppliers of crude oil to Japan before the outbreak of the Iran war in February.

At the same time, monthly imports from the United States jumped by about 15-fold to reach about 533 thousand barrels per day, and supplies from the Sultanate of Oman and Australia also increased.

The Middle East region accounted for 94 percent of Japan's crude oil imports in 2025, but its share decreased to 68.4 percent in September, recording an annual decline for the twelfth year in a row. The United States' share rose to 27.5 percent, becoming Japan's second-largest supplier.

The data showed that sales of domestic petroleum products in Japan decreased during the month by 10.4 percent on an annual basis to 2.12 million barrels per day.

According to the data, gasoline sales decreased 8.5 percent to about 721 thousand barrels per day, while kerosene sales increased 7.3 percent on an annual basis to about 89 thousand barrels per day.

The Egyptian General Petroleum Corporation purchased 6 cargoes of high sulfur fuel oil for delivery in November and December, through a recent tender. According to Reuters, citing commercial sources.

This comes at a time when Egypt's monthly imports of fuel oil increased more than three times in October compared to the beginning of the year.

Egypt relies on domestic gas to generate electricity, and it also relies increasingly on imported liquefied natural gas, but it has increased its imports of fuel oil after the Iran war led to increasing pressure on global liquefied natural gas markets and pushed prices to rise.

The quantity of each of the six shipments purchased by the Authority ranges between 90,000 and 100,000 tons of high-sulfur fuel oil, according to a trade source familiar with the tender.

According to Kpler, a company specializing in shipping analytics, Egypt’s total imports of fuel oil exceeded 640,000 tons in October, with no significant change from September, with a clear trend upward since April. However, the data showed that imports from January to October fell sharply to 3.94 million tons from 5.95 million tons in the same period in 2025.

Meanwhile, the country's imports of liquefied natural gas rose this year, reaching the highest level since the beginning of the year in July, but began to decline since August.

The Egyptian Ministry of Petroleum had allocated a budget of about $10.1 billion for liquefied natural gas in the fiscal year 2026-2027, which extends from July 2026 to June 2027, but prices rose beyond its estimates, according to an analyst, according to Reuters this week. According to the analyst, by October 6, the ministry had already spent $5.8 billion, putting it on track to exceed the budget set before the usual rise in demand in the spring and summer seasons.

Europe's benchmark natural gas contract hit its highest level since December 2022 this week, as disruptions to LNG shipments from the Middle East led to continued supply shortages.

LNG import shipments to Egypt are scheduled to rise to 184 shipments this year from 152 shipments, according to an official document. The country is holding talks with major energy companies to conclude supply agreements extending over several years, in light of the difficulty of local gas production keeping up with the increasing demand.

European Central Bank officials said on Friday that the bank may need to raise interest rates again to curb high inflation and prevent its spread to wages, hours after the bank left interest rates unchanged.

The European Central Bank discussed raising interest rates during its meeting on Thursday, but decided unanimously not to proceed with this step, based on an assessment that the wave of inflation resulting from rising energy prices has not yet led to serious indirect effects on prices and wages.

But officials' statements on Friday indicated that raising interest rates may only be postponed, and that this step may be on the table in December.

Fabio Panetta, Governor of the Bank of Italy, said in Rome, “Monetary policy can and should prevent price rises from becoming entrenched in the expectations and behavior of households and companies, leading to a spiral of rising wages and prices that will be costly to stop.”

He added: “With inflation expected to remain above the target level for an extended period, and risks tending to rise, further increases in key interest rates may become necessary.”

According to data from the London Stock Exchange Group (LSEG), investors see a two-thirds probability of raising interest rates in December, and they expect about three additional increases over the next year, on top of the two increases that were approved earlier this year.

The Governor of the Austrian Central Bank, Martin Kocher, supported Panetta's statements.

“If the situation does not improve in the near future, monetary policy conditions indicate the need for action,” Kocher said in a blog post published on Friday.

He added: “Inflation risks have clearly risen, but acting prematurely or waiting and doing nothing will not guarantee price stability.”

Inflation in the euro zone reached 3.8 percent last month, nearly double the European Central Bank's target level, and may accelerate further in the coming months as energy costs rise again and food prices increase.

A European Central Bank survey published on Friday showed that inflation may rise during the current year and next year at rates exceeding previous expectations, and may not return to the target level before 2028.

“The risks of prices rising faster and lasting longer than expected remain high,” said Ulu Kasik, Governor of the Estonian Central Bank.

He added, "It is understandable, therefore, that financial markets are betting on further increases in interest rates by the European Central Bank."

Pointing to the need for caution, Panetta said the ECB should take the recent rise in bond yields into account, as they are already raising borrowing costs, when “gradually calibrating monetary policy.”