Shippers worry turmoil in Egypt could cause supply disruptions in Suez Canal

The political instability in Egypt could lead to a toppling of its autocratic government; moreover, shippers are concerned that protests in the North African country could lead to supply disruptions if the Suez Canal or nearby pipelines are blocked.

Oil and gas flows routed through Egypt have so far moved uninterrupted as the Egyptian army increased security over the country's canals and pipelines. However, rising tensions in the port of Suez have prompted some shipping companies to order their ships not to change crews in Egypt; at the same time, government port services have endured some disruptions after some crude oil cargo was discharged at the Red Sea port of Ain Sukhna near the southern entrance to the Suez Canal.

While Egypt's oil production is not critical to world supplies, the country serves as a crucial transit point for oil and gas to Europe, Asia and the U.S., with nearly 2 million barrels of oil and petroleum making their way through the Suez Canal every day, the New York Times reports. If shipments are diverted around the Horn of Africa, deliveries will be backlogged and businesses and homes throughout the world could see higher energy prices.

Taking cargo around Africa adds on average 16 days to delivery times, and also increases insurance and other extraneous costs.