Egypt's impact on oil markets short-lived

July 16, 2013 at 8:51 AM

ALEXANDRIA, Va., July 16 (UPI) -- Political upheaval in Egypt is wreaking havoc on international oil markets though it's expected to be a short-term problem, a market analysis says.

The Egyptian military removed Mohamed Morsi from the presidential office July 3, barely a year after he took power as the first democratically elected leader in Egyptian history. Oil prices since the ouster have remained above the $100 per barrel mark.

The Motley Fool explains the situation in Egypt is similar to events in Libya in 2011, when civil war closed down one of North Africa's top oil producers. While Egypt does not produce much oil as Libya, as much as 3.2 million barrels of oil per day can move through the Suez Canal. It would add another 15 days to deliveries if the key shipping lane was closed because of the political situation in Egypt.

Bloomberg News reports a price for Brent crude oil of $109.39 per barrel Tuesday, a 0.3 percent increase from Monday trading.

A commentary said Monday there's enough spare capacity on the international market, however, to compensate for any major supply disruptions resulting from the Egyptian conflict.

"If this event poses a big threat to global supplies, it can be covered," it said.

Related UPI Stories
Latest Headlines
Trending Stories
House Majority Leader Kevin McCarthy drops bid for speaker
WikiLeaks offering $50K for video of Afghan hospital bombing
Murdoch sorry for implying Obama's not a 'real black president'
Reid sues exercise companies over eye injury
Lumber Liquidators to pay $10M in DOJ settlement