Monday, August 19, 2013

Why You Should Care About Egypt

Most Americans don't follow foreign politics and could care less about what's going on in the Middle East. They should! Frankly, most Americans can't even tell you who the Vice President is let alone who's in charge in Egypt. Actually you could bet that many Americans don't even know where Egypt is - let alone why they should care about it.

Americans (unfortunately) don't care about something unless it affects their pocketbooks. Obamacare is a good example. Americans are beginning to realize just what a negative affect The Affordable Care Act has on the economy AND on their wallets! Egypt is in the same boat - only Americans haven't felt it hit their wallets yet.

Here's how; Egypt borders the Suez Canal. International energy markets rely heavily on the Suez Canal for the transport of oil. Egypt also controls the Suez-Mediterranean Pipeline. These are vital pieces to the global oil infrastructure.

Egypt doesn't export oil itself, but they can control the flow of the world's oil supply. If the Suez Canal becomes blocked or shut-down, oil would have to be re-routed from Saudi Arabia to the USA via the Cape of Good Hope in South Africa. This will add 2,700 miles to the delivery to the USA. This adds more costs to the delivery AND adds to the delivery time of the oil. Oil-bearing ships in the area have already been warned to remain on alert because of the civil unrest in Egypt.

So Americans should, and can expect to see rising gasoline prices, because oil has reached $111 a barrel. If the Suez Canal closes because of Egypt's shaky government situation, we could see $10 a gallon gasoline. Think how that would CRUSH the American economy. The last major recession occurred when gasoline jumped to $4.25 per gallon. We still haven't recovered from that fiasco.

Rising oil prices would help collapse our economy and perhaps destroy America at the same time. So when you talk to someone who is CLUELESS about Egypt, you might inform them about the strategic importance to their personal life.

No comments:

Post a Comment