Thursday, January 27, 2011

Egyptian Riots & You

"The desire to protest has overwhelmed a large sector of society"

Egypt is going through the most significant political upheaval in over 34 years. The reasons are multi-faceted, but have to do with rising food prices and people feeling disenfranchised.

The same thing is happening in Tunisia and now Yemen.

Egypt is a bigger worry for me, the reason being that it controls (controlled?) the Suez Canal.

The Suez Canal is one big choke point for world trade and most importantly, oil. Along with the canal is the Sumed Pipeline, which crosses the northern region of Egypt.

Why is this important? Because nearly all the northbound oil shipments out of Saudi Arabia, 2.3 million barrels a day, goes through that pipeline.

Basically, if you are trying to ship oil out of the Middle East to Europe or the United States, you go through Egypt.

As events unfold, I will be watching the price of oil more closely, as it will greatly effects the profitability of the transportation industry and the general economy as well.



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