How the riots or turmoil in Egypt can affect the pricing of food and oil..How can it push up the prices of commodities?

Egypt is not a major oil producer or exporter when compared to the other countries of the region. It produces about 600000 barrels of oil a day but exports only 89000 barrels a day (A barrel of oil is defined as 42 US gallons which is almost 159 litres). Most of the produce is used up in domestic consumption. This export figure is extremely small when the per day global consumption is considered.Thus the impact of the turmoil in Egypt would not create much of a difference if only exports are concerned.
The real problem is the Suez Canal. The Suez Canal is controlled by Egypt. It is a link between Asia/Africa on one side and Europe on another by connecting the Red Sea and the Mediterranean Sea. This route has cut short the lenght of the previous sea route between the aforementioned two regions by several thousand miles. A huge amount of business is carried through the suez route everyday. Oil is mostly carried from one place to another via the sea route through Oil Tankers. These tankers use this route for transportation between the two regions. Now if the rebels in Egypt, in their process of regime breakdown, block the suez canal, the transportation in the region will come to a standby. This will in effect soar up the oil prices and which in turn will raise the food prices and other commodities in the countries which are major Importers of oil.



  • Kaushal Singh

    sir plz enable pdf creation for all topics.