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Egypt Completes Trial Run of New Suez Canal Channel Extension

An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
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Egypt Completes Trial Run of New Suez Canal Channel Extension

An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)

Egypt said on Saturday it had successfully tested a new 10 km channel near the southern end of the Suez Canal.

The Suez Canal Authority said in a statement that during a trial run two ships passed through a new stretch of the canal's two-way section without incident.

Following the 2021 grounding of the container ship Ever Given that blocked the vital waterway for six days, Egypt accelerated plans to extend the second channel in the southern reaches of the canal and widen the existing channel.

Its revenue from the waterway, the gateway to the shortest route between Europe and Asia, has nevertheless tumbled since Yemen's Houthi militias began attacking ships in the Red Sea in November 2023 in what they say is solidarity with Palestinians in Gaza.

Egyptian President Abdel Fattah al-Sisi said on Thursday that due to "regional challenges", the country had lost approximately $7 billion in Suez Canal revenue in 2024, marking more than a 60% drop from 2023.

According to the Suez Canal Authority, the latest expansion extends the total length of the canal's two-way section to 82 km from a previous 72 km. The canal is 193 km long in total.

"This expansion will boost the canal's capacity by an additional 6 to 8 ships daily and enhance its ability to handle potential emergencies," the Suez Canal Authority said in its statement.

Earlier this year, Egypt said that it was considering an additional expansion project separate to the 10 km channel extension.

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Oil Prices Set for Second Annual Loss in a Row, Stable Day on Day

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
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Oil Prices Set for Second Annual Loss in a Row, Stable Day on Day

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo

Oil prices were on track to end 2024 with a second consecutive year of losses on Tuesday, but were steady on the day as data showing an expansion in Chinese manufacturing was balanced by Nigeria targeting higher output next year.

Brent crude futures fell by 7 cents, or 0.09%, to $73.92 a barrel as of 1306 GMT. US West Texas Intermediate crude lost 4 cents, or 0.06%, to $70.95 a barrel.

At those levels, Brent was down around 4% from its final 2023 close price of $77.04, while WTI was down around 1% from where it settled on Dec. 29 last year at $71.65.

In September, Brent futures closed below $70 a barrel for the first time since December 2021, while their highest closing price of 2024 at $91.17 was also the lowest since 2021, as the impacts of a post-pandemic rebound in demand and price shocks from Russia's 2022 invasion of Ukraine began to fade.

According to Reuters, oil prices are likely to be constrained near $70 a barrel in 2025 as weak demand from China and rising global supplies are expected to cast a shadow on OPEC+-led efforts to shore up the market, a Reuters monthly poll showed on Tuesday.

A weaker demand outlook in China in particular forced both the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) to cut their oil demand growth expectations for 2024 and 2025.

With non-OPEC supply also set to rise, the IEA sees the oil market going into 2025 in a state of surplus, even after OPEC and its allies delayed their plan to start raising output until April 2025 against a backdrop of falling prices.

Investors will also be watching the Federal Reserve's rate cut outlook for 2025 after central bank policymakers earlier this month projected a slower path due to stubbornly high inflation.

Lower interest rates generally incentivise borrowing and fuel growth, which in turn is expected to boost oil demand.

Markets are also gearing up for US President-elect Donald Trump's policies around looser regulation, tax cuts, tariff hikes and tighter immigration, as well as potential geopolitical shifts from Trump's calls for an immediate ceasefire in the Russia-Ukraine war, as well as the possible re-imposition of the so-called "maximum pressure" policy towards Iran.

Prices were supported on Tuesday by data showing China's manufacturing activity expanded for a third straight month in December but at a slower pace, suggesting a blitz of fresh stimulus is helping to support the world's second-largest economy.

However, that was balanced out by potential for higher supply next year, as Nigeria said it is targeting national production of 3 million barrels per day (bpd) next year, up from its current level of around 1.8 million bpd.