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The Suez canal is under threat?
Material posted: -Publication date: 08-02-2011

Events in Egypt continue to engage the attention of the world media and experts who try to predict the impact of the Egyptian political passions at the regional and international situation, including the economic aspect. In early February, on the tape media appeared the following message: oil Minister Venezuela Rafael Ramirez stated at a press conference in Caracas that if Egypt as a result of the continuation of the riots is forced to close the Suez canal, the world price of oil could soar to $ 200 per barrel, that could spell disaster for the world economy.

How justified such a prediction? This question is answered by the analyst of the Center for strategic estimates and forecasts (TSSOP) Andrey Ganov.

Despite the importance of the Suez canal for global trade (including supplies of hydrocarbon raw materials), its value should not be overstated. So, through the canal takes about 8 % of global Maritime communications, it is certainly a lot, but not catastrophic.

If to speak directly about oil tankers going through the Suez canal, the total volume passing through the channel of oil does not exceed 1.5 million barrels per day, i.e. less than 2 % of the daily consumption in the world.

The main consumer of the "transit" of raw materials, for obvious reasons, is Europe. However, for Europeans the potential closure of the Suez canal is not a tragedy, because in this way the Old world is delivered only 7-9 % of the total EU imports of oil. Thus, in the present Suez at a stretch can be called a all-important oil artery.

When it comes to oil tankers passing through the canal, significant one more time. By modern standards the tanker fleet, the Suez sea route is very "close and small", so it's super-tankers are not able to move through the channel and are forced to go round the African continent. While the costs of the Europeans for the supply of "black gold" in the framework of the alternative routes are not so great, considering that the cost of freight the largest oil-loading ships in the past two years, fell sharply (due to overcapacity), and performance characteristics of modern large tankers allow us to circumnavigate Africa for two weeks.

Let's not forget about one more. Parallel to the Suez canal is the SuMed pipeline, through which Europe receives about 1 million barrels of oil. Thus the capacity of the pipeline allows for double the throughput compared to current levels, i.e., there is an alternative in case of interruption in the functioning of the channel. If would be disrupted and this "oil thread", the Europeans can easily increase its imports of "black gold" from Russia the current utilization level of domestic pipelines and other transportation facilities this allows.

And the last nuance. Though the channel and formally belongs to Egypt, but according to international legislation and agreements, the Suez sea route can be used in times of peace and in time of war any vessel under any flag. The latter circumstance allows in the case of actual interruption of the channel to intervene in the conflict by international naval forces. So, in the Mediterranean based sixth fleet of the USA, and off the coast of Somalia in the Gulf of Aden on duty NATO ships protecting merchant ships from pirates, but if necessary, having the ability to throw part of the squadron to the Suez.

Summarizing the above facts, we can conclude that the events taking place around the Suez canal must not have any significant impact on oil prices in the long term.

It is worth noting the key phrase here "in the long run, because the immediate effect of stopping the operation of the channel will be very sharp, because oil players people are extremely emotional. Although after some reflection, everything should return to normal.

While it would be desirable to hope for the wisdom of the Egyptian opposition, who will not invoke the wrath of the world community and cut the branch on which you sit, because the exploitation of the Suez canal annually brings to the Treasury of the Arab Republic of Egypt about $ 5 billion, i.e. about 10 % of all revenues in the budget of this country.


Tags: Africa

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