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Monday, January 31, 2011

Unrest in Egypt, shivers in the world

Political crisis is in Egypt is spreading shock waves across various world financial markets , In Egypt there is civil war like situation.
Now let’s see how crisis in Egypt  is affecting the world.
The Suez Canal, which comes under Egypt’s control, is the major water way in the world which provides shortcut for crude carrying ships operating between Europe and Asia without navigating around Africa.
SUMED pipeline (Suez Mediterranean pipeline), is a 320 KM oil pipeline with 50% ownership of Egypt.
Political unrest in Egypt might result in disruption of oil supply and that’s why crude started rising.
When there is political unrest, precious metals also starts rising, which was going southwards few days back due to strengthening  dollar.
Egypt crisis affected the financial markets all over the world including Indian markets too.
When  Iraq invaded Kuwait, the whole world went against Iraq but when Tibet’s accession by China took place, no country came forward; reason was simple, Tibet did not have oilfields like Kuwait.
This is the importance of crude in the world economy.

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