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Oil Prices Rise Sunday as Egypt Unrest Gooses Market
Sharon Epperson, CNBC
Oil remains the biggest trade — and perhaps the biggest risk for traders — as unrest in Egypt continues.
U.S oil prices climbed to over $90 a barrel (up $.60 from previous close) as the electronic session began Sunday night, extending Friday’s 4% gain.
…Europe would likely be more exposed than U.S markets from any disruption to Egypt’s key routes for oil transit — the Suez Canal and Sumed Pipeline — the volume on the London-based Intercontinental Exchange for Brent or WTI futures was not particularly high on Friday.
… “European traders (who would be primarily exposed to a Suez disruption, but who are also more aware of the functioning of the Suez) were in lower panic mode than asset managers on Wall Street,” said energy analyst Olivier Jakob of Petromatix.
(30 January 2011)
Egyptian Unrest Has Repercussions in Global Economy
Chip Cummins, Wall Street Journal
The violent clashes and looting in Egypt spawned by the standoff between protesters and President Hosni Mubarak are threatening economic repercussions across the region and around the world.
Egypt’s economy is relatively small—the fourth-largest in the Mideast, with a gross domestic product last year of just under $217 billion, according to International Monetary Fund estimates. But the country plays an outsize economic role as home to one of the world’s most important trade and energy thoroughfares, the Suez Canal.
… In the short term, the biggest global economic worry remains oil prices. Egypt itself isn’t a big energy producer. But significant shipments of oil and petroleum products pass through Egypt each day on their way from the Mideast to European and U.S. markets.
(30 January 2011)
White House quietly prepares for a post-Mubarak era in Egypt
Peter Nicholas, Los Angeles Times
A tight-lipped White House is taking an even-handed approach to the crisis in Egypt, suggesting that President Mubarak might be able to hold onto power if he allows competitive elections and restores individual freedoms. But inside the Obama administration, there are signs that officials are preparing for a post-Mubarak era after three decades.
One former senior administration advisor said he had spoken to his old colleagues inside the Obama administration in recent days about the unrest in Egypt. As early as last Wednesday, the Obama administration recognized that they would not be able to prop up the Mubarak regime and keep it in power at all costs, the former official said.
“They don’t want to push Mubarak over the cliff, but they understand that the Mubarak era is over and that the only way Mubarak could be saved now is by a ruthless suppression of the population, which would probably set the stage for a much more radical revolution down the road.”.
(30 January 2011)
Juan Cole interview: “Egypt is a Praetorian Regime”
Sharif Abdel Kouddous, Democracy Now
… JUAN COLE: The Arab world has seen, in the last three decades, a series of Arab nationalist regimes, relatively secular, which have become increasingly sclerotic. These were postcolonial societies, societies that had been under Western dominance often, which—and that dominance was opposed by nationalist movements, led by legends like Habib Bourguiba in Tunisia or Gamal Abdel Nasser in Egypt. And they were wildly popular in their day, because they were throwing off the West. But as time went on, the regimes that were set up became dominated by a kind of state elite, a relatively small group of people that benefited from state power, from the large public sector, from the throwing of contracts to particular individuals in the private sector. And they proved themselves unable to adapt over time to a globalizing world.
… Hosni Mubarak is a former air force chief of staff and general. He was trained in Moscow. He speaks good Russian. And he is the third in the series of military leaders of Egypt since 1952, or you could say the fourth, in some ways. In any case, they’ve all been military men. They’ve all come out of the military. They’re backed by the existing military. And that’s—so Egypt is a Praetorian regime, and this is sometimes forgotten now because Mubarak wears business suits and there’s an elected parliament, although the elections are widely believed not to be on the up and up.
… the U.S. aid is nice for the Egyptian elite to have. I don’t think it’s essential to them. It should be remembered that the U.S. aid is a little bit of a shell game, because Congress typically directs that all of the matériel come from the United States. So it’s actually aid to U.S. corporations, and then the Egyptians get some of it in the form of goods and so forth, military weaponry, which they mostly don’t need.
I think the U.S. aid was initiated because Egypt made a peace treaty with Israel. It’s Congress’s way of more or less bribing Egypt to remain on good terms with Israel. A lot of it is military aid, so that the Egyptian military remains relatively strong.
… one of the things that drives this regime’s repressiveness, is that it is afraid of Muslim fundamentalist movements. Whether they are radical—and there have been a number of important radical movements in Egypt that have resorted to violence—or whether they are social and political, as with the large and important Muslim Brotherhood movement, the regime is very afraid—and this comes out from U.S. cables that have been released by WikiLeaks—that the Muslim Brotherhood will find a way to take over. And, you know, when Khomeini overthrew the Shah in Iran in 1979, the first thing they did was execute a lot of the generals. And the generals in Egypt are bound and determined that a similar fate does not await them.
… the Americans, you know, are in a difficult position in some ways in Egypt. On the one hand, you know, the State Department does do human rights reports. It does support a widening of civil liberties in these countries. On the other hand, Egypt is a central ally of the United States, and the U.S. would certainly be very unhappy to see it replaced by a Muslim Brotherhood regime that would abrogate the Camp David Accords, would adopt a hostile posture towards Israel possibly, would cease military cooperation with the United States. So, the U.S. is trying to navigate between the shoals of these various dilemmas.
(29 January 2011)
Also at ZNet.
Related by Juan Cole: US Foreign Policy and the Corruption Game.
Israel ‘anxiously monitoring’ turmoil in Egypt
Batsheva Sobelman, Los Angeles Times
Continuing unrest in Egypt could pose a threat to the decades-old alliance with Israel, which is bracing for a possible backlash. Peace with Egypt is a cornerstone of Israel’s regional strategy.
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… The peace between them may be cool at times, but Israel’s decades-old alliance with Egypt has been the stable keystone of its regional strategy. Commentators fear a dramatic regime change could bring down the whole structure. Israel, which is already facing a strained relationship with another former friend in the region, Turkey, could find itself further isolated.
“If Egypt becomes hostile to Israel even to the extent that Turkey is,” said former Israeli Gen. Giora Eiland, now a researcher with the Tel Aviv-based Institute for National Security Studies, “this will be the biggest strategic change Israel has known in the past 30 or 40 years.”
… For now, Egypt’s relationship with Israel isn’t on the demonstrators’ agenda, but this could change if the regime does, as the opposition objects to the ties. Mubarak and his close circle are committed to peace with Israel, said Eli Shaked, Israeli ambassador to Egypt from 2003 to 2005. But if the next president comes from different circles, “the first thing on his agenda will be to harm peace with Israel,” he said in a radio interview.
Others were not so pessimistic. “I don’t see the Muslim Brotherhood taking over Egypt,” said Zvi Mazel, fellow at the Jerusalem Center for Public Affairs and a former ambassador to Egypt, noting that the Mubarak government and its predecessors have a long history of beating back the movement’s influence. In the past, Egyptians voted for the Muslim Brotherhood as a way to protest Mubarak, but “if reform is real and elections truly open, people will have no reason to vote for them,” Mazel said.
Although this scenario would require a lot of work, Mazel said, if a reasonable government were elected “it would have no logical reason to undo peace, lose American support and pour the nation’s resources into conflict with Israel instead of reforms.”
(30 January 2011)
