As the levels of oil and liquefied natural gas in the world continue to rise and drive prices lower, the need for new areas of export to open up has been greater than ever before. Gas prices have remained low for a number of months, which has seen many major suppliers seek out new areas to export their natural gas and oil. One of the top areas explored by suppliers, including Israel, has been Egypt, but many are finding this a difficult market to crack.
Israel has been seeking a strong economic link with Egypt in recent months, as the historic country has always been reliant on the oil and natural gas of Israel. However, the latest issues facing Egypt have already caused problems with existing suppliers who are renegotiating the terms of their supply deals with the Egyptian government. Reports have stated a backlog of cargo ships is waiting for the go ahead to enter Egyptian waters as the cash crunch caused by the Russian air disaster highlights the problems in the economy. The air crash led to a decline in tourism in Egypt, which has placed a great burden on the fragile economy to remain successful.
The current level of natural gas consumption in Egypt requires between six and eight cargo ships each month to provide the fuel at a cost of between $20 and $25 million per ship. Israel had planned to join major suppliers, such as Shell and BP, in providing oil and gas supplies, but has now seen talks called off as Egypt looks to extend payment deadlines with its current partners.