Egypt to build 16 million barrel strategic crude oil reserve

Egypt plans to establish its first strategic crude oil reserve of approximately 16 million barrels to secure local refinery needs against potential global market disruptions or supply chain issues.

According to a government official, the reserve will be built through new supply agreements involving 10 million barrels from Libya and 6 million barrels from Iraq. These quantities are designated specifically for the strategic reserve and are separate from the monthly supplies typically managed by the Egyptian General Petroleum Corporation.

Egypt began receiving Libyan oil for this purpose in August, having already received about 3 million barrels. The remaining Libyan quantities are expected within three months, with the supply program continuing through December. The goal is to complete the 16-million-barrel reserve by the end of 2026. The target reserve represents roughly 2.3 months of Egypt's average monthly supply of 7 million barrels.

The contractual price for the reserve is approximately $85 per barrel, totaling about $1.36 billion, excluding transport, storage, and insurance costs. This initiative coincides with Egypt's efforts to increase refinery operating rates and domestic petroleum product production to reduce fuel import costs. By the end of 2025, Egypt's nominal refining capacity is projected to reach 829,000 barrels per day.