Cairo on Tuesday downplayed the impact of the Israeli Ashkelon-Eilat oil pipeline on the revenues and competitiveness of the Egyptian Suez Canal.
A rare official statement by Egypt's state-owned Suez Canal Authority (SCA) said the pipeline, once re-operated, would slightly affect the total flows of trade crossing the Suez Canal.
“It is expected that the impact of the pipeline, once operational, will not exceed 12-16% of the volume of crude oil trade heading north, and not of the total trade traffic crossing the canal,” it said.
The SCA statement noted that the pipeline links the Eilat oil port on the Red Sea coast with the Ashkelon oil port on the Mediterranean coast and that the canal route will remain the shortest and most secure link between East and West since shipping containers passing through the canal can transport larger quantities of goods at a cost lower than any land routes.
The statement said SCA's revenues come from diverse sources, adding the containers bring in 50 percent of the canal's total revenues while crude oil contributes only 6.5 percent.
Dr. Ahmed Kandil, the head of energy studies program at Al Ahram Center for Political and Strategic Studies, said the economic benefits of the oil pipeline are “not huge.”
He said political tensions and regional geopolitical dimensions would make it risky for international institutions to think about funding the pipeline.
The Suez Canal is one of Egypt's main sources of national income and foreign currency reserves.
