Egypt Influence on World Oil and Fuel Prices

Recently published articles talk about how that latest demonstrations leading to the standing down of President Mubarak in Egypt, has caused world oil prices to increase.

The conflict of Egypt and the influence this could have on the rest Middle East resulted in sharp increases in the price of oil and lead to global fuel prices to rocket last week.

Fuel prices are reported to have jumped through the US$100 per barrel mark and are still rising. The concern is that the events of Egypt could influence the Middle East; which supplies over half of the world’s fuel requirements.

Another feared repercussion is for the transportation of fuel. In the late 1990’s Egypt and Israel signed an agreement to make the Suez (the main shipping canal) a ‘pipeline of peace’.

Since the standing down of Mubarak there are fears that if access to this core shipping canal is denied, the transportation of fuel will be severely affected; resulting in huge price rises.

Some analysts believe that the end of Mubarak could mean that fuel prices may become more stable in future or could even lower, however if action is seen in the Middle East this stability could be jeopardised.