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Egyptian unrest poses threat to LNG market

LNG Industry,

Production at Egypt’s LNG export terminals has been unaffected by the civil unrest in the country, however Egypt’s importance as a gas producer has been diminished in recent years as increased domestic demand has led to lower exports. There are concerns that if the unrest spreads and threatens the Suez canal it could seriously constrict supply though, as up to 13% of the global LNG trade uses the Suez canal to access world markets.

Brent Crude has broken the US$ 100/bbl for the first time in two years, so it is evident that political unrest in Egypt is having a significant effect on the oil markets. Egypt has a rich supply of natural resources such as gold, oil and gas which are hard currency earners for the country, and it would be hugely damaging to Egypt’s economy if the supply of any of these was disrupted.

Some political analysts are likening the unrest in Tunisia and Egypt to the events in 1989, which brought down the Iron curtain in Eastern Europe. If this prophecy proves true then the road to economic recovery and stabilisation will almost certainly not be a quick one and more countries in the region could see serious upheavals. The ruler of Kuwait Sheikh Sabah Al-Ahmad Al-Sabah has reportedly given each of its citizens the princely sum of US$ 3559 as a present, which is a very direct (but effective) way to curry favour with his subjects.

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