Two Iranian navy ships entered the eastern Mediterranean after passing through the Suez Canal on Tuesday, the first such voyage since 1979 and one that has raised sharp concerns in Israel, reports the FT. Egyptian officials told Reuters news agency that the two vessels – one frigate and one supply ship – had entered the Suez Canal at 5.45am. They entered the Mediterranean Sea in the late afternoon, according to several reports citing Egyptian authorities.
Around 600,000 demonstrators have so far gathered in the centre of the Egyptian capital to oust President Hosni Mubarak, Al Jazeera TV reports. The country’s army has promised not to resist the protests, while the new vice-president has offered to talk with the political opposition, reports the NYT. As the country’s political crisis comes to a head, uncertainty over its economic effects linger. Convoy systems for shipping on the Suez Canal continued as normal on Monday even as concerns over the canal’s role in supplying oil edged the price of Brent crude above $100, the FT says. A broader fear is any domino effect of unrest on other Arab regimes which supply far more oil to global markets than Egypt, the FT adds.
Oil prices broke through the $100 a barrel level for the first time in more than two years, amid market fears that Egypt’s turmoil will hit oil flows, reports the FT. Although both the Suez Canal and a pipeline linking the Red Sea with the Mediterranean continue to operate, violent protests aimed at ousting Hosni Mubarak, Egypt’s president, has brought much of the economy to a halt. Separately, the FT reports that the world’s shipping industry is closely watching the situation in Egypt and is anxious about any possible disruption in traffic on the strategically vital Suez Canal. FT Alphaville suggests there are also factors other than Egypt driving up crude oil prices.
Oil prices broke through the $100 a barrel level for the first time in more than two years, amid market fears that Egypt’s turmoil will hit oil flows, reports the FT. Although both the Suez Canal and a pipeline linking the Red Sea with the Mediterranean continue to operate, the popular uprising to unseat Hosni Mubarak, Egypt’s president, has brought much of the rest of the economy to a halt. The FT adds that the world’s shipping industry is watching the situation in Egypt especially carefully because of the potential for the country’s unrest to disrupt traffic on the Suez Canal, one of the world’s most important international waterways. Meanwhile, FT Alphaville urges caution on those joining a simple line from Brent at $100 a barrel and fears over the closure of the Suez canal.
With oil on the rise, what next for equity markets?
That’s the question KBW try to answer in a note out on Monday. The analysts look for correlations over the last 50 years between big (ten and 20 per cent quarter on quarter) WTI rises and changes in the S&P500 and the Keefe Bank Index. Read more
Speculation about the potential closure of the Suez canal is mounting on Friday, probably the reason that WTI prices are heading higher.
Notably, prices of Brent crude (which is not continent-blocked; it comes from the North Sea and doesn’t tend to get transported through the Suez canal) are not climbing. Read more