by If the Arab revolution spreads from North Africa to the oil-producing Gulf countries, the global economy will face a catastrophe. Already, the growing risks are incepted in oil prices.
The wave of public protests in Arab countries began in Tunisia in late December 2010, and then it spread to Egypt, Jordan, Libya and Yemen.
Of particular concern is the global market turmoil in Egypt, which began on January 25. Oil prices have reached a peak in the last two years, and jumped by nearly 5.5% from $ 95.14 per barrel of Brent crude oil on January 24 to $ 100.34. Although Egypt does not produce so much oil, it controls the Suez Canal, the main corridor through which raw materials are delivered to Europe.
Events in Egypt threaten to destabilize the Middle East, and in particular the exacerbation of the Palestinian problem. If the power in Egypt achieves radicals, it is likely to intensify efforts to harm Israel or the West, helping Israel ??. This can manifest itself in the disruption of oil supplies, the blockade of the Suez Canal, and so on.
But the current rise in oil quotes are “flowers” in comparison with the possible economic consequences of the political crisis in oil-producing Gulf countries. The Middle East is the main oil-producing region in the world, which accounts for about 30% of global oil production. Even if for a short time, due to the disturbances, the supply of oil from the Persian Gulf was reduced, the oil market would be waiting for collapse. Other oil-producing countries are not able to replace these volumes even for two months of global consumption.
Historical analogy is possible with the oil shock of 1973, when the Arab-Israeli war led to a subsequent reduction in the supply of OPEC oil on the market. Consequently, the quotation of “black gold” in less than six months increased more than threefold; from $ 3 to $ 10 per barrel. This caused a negative effect on the world economy and especially on the largest oil importers – the U.S. and Europe.
According to some experts, whatever happens, you can refer to it as a “war for oil.” The Old World remembers its colonial past, it can be assumed, not without the support of the United States, which also has an interest in oil.
There is a perception that the data on the world’s proven oil reserves in recent years, is an artificial overstatement to supply the U.S. that allows to buy oil in the Middle East for quite low prices. This has allowed the U.S. to create the largest world oil reserves and to develop their own minimum deposit. European economies are also allowed to seriously save on the purchase of hydrocarbons. Arab countries do not want to sell more oil at a larger discount. Therefore, they will be forced to cut prices, and in countries with particularly stubborn rulers – to finance the revolution and to carry out peacekeeping operations.
But do not throw a scenario in which the events in the Arab world can move beyond the region and move into Central Asia, since almost all states of this region have the potential risk of regime change.
Possible implications of a sharp rise in oil prices for Russia
Russia has a chance to become the number one supplier of oil – for Europe especially. And for both, new and sprawling markets of China, India, etc. But in this case Russia will face a question – to supply oil to Europe or Asia? Because oil reserves will not be enough for both regions, and if you take into account the payment capacity of the two regions, Europe is clearly not the favorite.
It is very significant that all the influential world players who have considerable interests in the region, will sooner or later come to a common position and develop a common attitude. Amazingly, nearly all have sided with the people in those states who have proven their determination to dislodge the regime, and in those states where the people demanded a fundamental change in the national government to increase their participation in decision making.
In this sense, the illustration is the process of adopting sanctions against Libya. First, the U.S., then the EU, then the UN Security Council unanimously adopted a decision to impose sanctions against Kaddafi. Such unanimity does not surprise us. It seems that the world is gradually developing common standards for the new world order, although in this way they would still face many dangers and obstacles.
It is logical to think that Russia will again cooperate with the United States and forever forget the Cold War, as apparently the main priority of foreign policy is the interests of the state, no matter what region, country or organization it cooperates with.
The Arab revolution in North Africa has become a catalyst for social change in these nations, and has begun the building a new world order.
IANA ROGINSKA
