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EIA: Egypt has 'modest' impact on energy

Egyptian anti-government demonstrators react to a speech by Egyptian President Hosni Mubarak, who failed to announce his immediate resignation, as tens of thousands gathered in Cairo's Tahrir Square on February 10, 2011. Embattled Mubarak delegated power to his deputy and former intelligence chief Omar Suleiman and proposed constitutional reforms but said the transition to end his 30-year-reign would last until September. UPI | <a href="/News_Photos/lp/dfd2b43753f92c0787fca51238f7479c/" target="_blank">License Photo</a>
Egyptian anti-government demonstrators react to a speech by Egyptian President Hosni Mubarak, who failed to announce his immediate resignation, as tens of thousands gathered in Cairo's Tahrir Square on February 10, 2011. Embattled Mubarak delegated power to his deputy and former intelligence chief Omar Suleiman and proposed constitutional reforms but said the transition to end his 30-year-reign would last until September. UPI | License Photo

WASHINGTON, Feb. 11 (UPI) -- The U.S. energy sector would see few effects if political unrest in Egypt leads to the closure of the Suez Canal and other key transit routes, an official said.

Throngs of protesters descended Friday on Cairo's Tahrir Square intent on convincing Egyptian President Hosni Mubarak to step down.

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Unrest in Egypt erupted in January following a revolution that brought down the government of Tunisia. Political turmoil across much of the Arab world in part led to a rise in crude oil prices, though energy officials said prices have increased steadily since at least September.

Richard Newell, director for the U.S. Energy Department's Energy Information Administration, testified before a U.S. House of Representatives subcommittee on energy and power describing the consequences of the unrest in the Middle East.

Newell said that diverting oil around Africa would add 12 days to delivery times but expected few overall impacts on U.S. energy markets.

He said that even if all 3.1 million barrels of oil traveling through the Suez Canal each day were diverted, there would be a "modest" impact on global oil shipments.

He added that major oil shocks were unlikely unless disruptions across the entire region were to occur.

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Newell stressed that it wasn't clear to what extent oil prices were reflecting overall concerns about unrest in Egypt.

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