by Eli Leon, Reuters and Israel Hayom Staff
Riyadh informs Cairo it is suspending delivery of oil products expected under a $23 billion aid deal signed between countries over lack of economic reforms • Egypt's reluctance to side with Saudis in Yemen conflict said to be key factor in decision.
Saudi Arabia has informed Egypt that shipments
of oil products expected under a $23 billion aid deal have been halted
indefinitely, suggesting a deepening rift between the Arab world's
richest country and its most populous.
Saudi Arabia has been a major donor to Egypt
since President Abdel-Fattah el-Sissi seized power in mid-2013, but
Riyadh has become frustrated with his lack of economic reforms and his
reluctance to be drawn into the conflict in Yemen.
During a visit by Saudi King Salman in April,
Saudi Arabia agreed to provide Egypt with 700,000 tons of refined oil
products per month for five years but the cargoes stopped arriving in
early October, as festering political tensions burst into the open.
Egyptian officials said since that the
contract with Saudi Arabia's state oil firm, Aramco, remains valid, oil
should start flowing again soon.
On Monday, however, Egyptian Oil Minister Tarek el-Molla confirmed shipments of petroleum products had stopped.
Aramco has not commented on move.
"They did not give us a reason," an Oil
Ministry official said. "They only informed the authority about halting
shipments of petroleum products until further notice."
The move comes as a source in el-Molla's
delegation said that he would visit Iran, Saudi Arabia's main political
rival, to try to strike new oil deals.
Egypt and Iran's diplomatic relations have
been strained since the 1970s. An Egyptian official visiting Iran would
cement a break in its alliance with Saudi Arabia and mark a seismic
shift in the regional political order.
Speaking to reporters in Abu Dhabi, el-Molla
said he was not going to Iran. An Iranian oil official later said that a
report by the semiofficial Mehr news agency suggesting el-Molla would
meet his Iranian counterpart in Tehran on Monday was "incorrect."
Egyptian Prime Minister Sherif Ismail also
said el-Molla was not visiting Iran and Egypt was not negotiating with
Tehran over importing oil products, state newspaper Al-Ahram reported.
But two security sources and the source in
el-Molla's delegation said the minister had been scheduled to go, and
the low-key visit was now delayed after the news became public.
Gulf Arab countries, led by Saudi Arabia, have
pumped billions of dollars into Egypt's flagging economy since former
general el-Sissi took over after a year of divisive rule by the Muslim
Brotherhood.
But with the Brotherhood threat diminished, Gulf rulers
have grown disillusioned at what they consider el-Sissi's inability to
reform an economy that has become a black hole for aid, and his
reluctance to back them on the regional stage.
Eli Leon, Reuters and Israel Hayom Staff
Source: http://www.israelhayom.com/site/newsletter_article.php?id=37801
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