BL reported that the ongoing crisis in Egypt has raised fresh concerns about the availability and security of Suez Canal. The global shipping industry is watching with bated breath developments in the region and for any early signs of more trouble.

Given that Suez Canal is a strategic conduit for movement of oil from the Gulf into Europe and from Europe into Asia any disruption in the region has serious implications for the crude market. At a time when oil prices are gaining from strength to strength because they are more fundamentally driven, closure of the canal can have adverse effects.

It may be recalled the canal was closed for several months during 1956 and for several days in 1967. However, at this point of time there is nothing to suggest that the Egyptian government would decide to close the canal.

Barclays Capital said that in the unlikely event that the Egyptian government opts to close the canal and the pipeline, the loss to oil trade flows would amount to about 2 million barrels per day to 3 million barrels per day of crude and around 2 million barrels per day of products.

(Sourced from Hindu Business Line)