Azerbaijan, Baku, Feb. 5 / Trend A. Badalova /
There is slight probability of occurring political riots, observed in Egypt now, in other major countries in the region and growth in hydrocarbon prices in this regard, analysts of one of British leading consulting companies for economic research Capital Economics said.
There will not be "Domino effect" in the region. At least, there will not be the scenario that many individuals fear, British analysts' report on the impact of Egyptian riots said.
The riots in Egypt, calling for incumbent President Hosni Mubarak's resignation, began on Jan. 25. Despite the fact that Egypt is not a major oil producer, there are serious concerns that hydrocarbon prices can rise up to record level. It will have a negative impact on the global economy. In particular, such a scenario is possible if the unrest spread to the larger oil-producing countries of the region and as a result of oil supplies disruption through the Suez Canal.
The Suez Canal provides about 8 percent of world oil delivered by sea. It is the major channel of hydrocarbon supplies to Europe and the U.S. About 2.5 million barrels of oil are supplied daily through the Suez Canal.
Of course, oil prices will rise significantly if there is serious violating of traffic through the Suez Canal and suspending the production anywhere in the region, the report said. But there are no signs of such scenario yet, analysts said. In particular, during this political crisis, none of the major players will want to lose the business connected with the Suez Canal.
According to Capital Economics analysts, some impact on the other countries of the region is inevitable, given the fact that the crisis erupted in Egypt after a political coup in Tunisia. "But, nevertheless, there are few chances that the riots will break out in countries, that pose the greatest importance for the global economy, such as Saudi Arabia and other members of the Cooperation Council for the Arab States of the Gulf," the report of the analysts said.
This is connected with the fact that the living conditions are higher in these countries, compared to Egypt. Moreover, the ability of the government of the largest oil-producing countries to overcome these situations has increased, due to the recent rise in oil prices.
British analysts stipulate the recent rise in oil prices, particularly prices on North Sea Brent (more than $100 per barrel) by the increase in global demand for hydrocarbons, rather than the political instability in the Middle East. According to the analysts, the price on Brent will drop up to $ 85 per barrel by late 2011 and up to $ 75 per barrel by late 2012.
According to the U.S Journal Oil and Gas, referred by U.S. State Energy Information Administration (EIA), as of early 2011, the proven oil reserves in Egypt amounted to 4.4 billion barrels. In 2010, oil production in the country amounted to 660,000 barrels per day. The demand for oil in the country last year hit 710,000 barrels per day.
According to the EIA, despite the fact that Egypt is an oil importer, last year the country exported about 145,000 barrels per day. Roughly 50,000 barrels per day of the total export fell to India, 29,000 barrels per day - Italy, 16,000 barrels per day - the United States. The rest oil exported by Egypt was delivered to other European countries and Asia.