The political uncertainty in Egypt is has having a direct effect on the global economy. Concern that the flow of oil tankers through the Suez Canal could be disrupted has led to the price of US crude oil reaching $100 a barrel – the highest level in more than a year. This comes as a direct result of the Suez Canal being a key choke point in the global oil trade. Indeed, 5% of the seaborne crude, along with 14% of seaborne liquified natural gas flows through the canal.
Within this context, the canal is a pivotal point for the global economy, and therefore a key target for protesters to damage the Egyptian government. Disrupting the flow of traffic is therefore a key strategy for anti-govenment protesters, which was evident in February when the canal had to close, and in March when speedboats were released in the canal to create obstacles for maritime traffic.
Notably, this comes on top of disrupted supplies from Libya from armed militias and terrorist organisations like AQIM (see my interview in the Sunday Express). Indeed, as reported in the FT, “Antoine Halff, the influential head of the International Energy Agency’s oil markets division has warned of a delayed impact of the Arab Spring on oil production, and the IEA is now forecasting no net growth in oil output from Africa’s four Opec members over the next five years.”
This clearly provides a new strategic landscape for both the US and EU to navigate as they try to overcome the consequences of the 2008 economic fall out.
- Egypt Military Steps Up Suez Patrols to Secure Global Trade Link (gcaptain.com)
- Suez Canal Security On “High Alert” Amid Escalating Tensions (zerohedge.com)
- Egypt’s military steps up Suez patrols (stripes.com)
- Egypt unrest pushes oil prices near $100 (money.cnn.com)
- Receive the latest cyber security project updates from Petroleum Development Oman, Shell, GDF Suez | Oil and Gas Cyber Security, 25th and 26th November 2013, London, UK (prweb.com)
- Egypt fears push oil price over $100 (bbc.co.uk)
- Ship rates drop as U.S. oil imports fall most since ’91 (fuelfix.com)
- Crude oil prices rise on Tuesday (news.polymerupdate.com)