Study abroad student witnesses protests in Egypt
Recent protests in Egypt have captured the world’s attention and effects are as far-reaching as Logan, Utah. One student was caught in crossfire of the protests and all may suffer economic repercussions.
The protests, which began Jan. 25, were largely inspired by a recent revolution in Tunisia. Angered by a lack of free speech and elections, rising food prices and low minimum wages, Egyptians took to the streets in Cairo and several other Egyptian cities. The protests culminated yesterday when Egyptian President Hosni Mubarak shocked the world in a broadcasted speech by refusing to step down, yet delegating some of his power to the vice president. Many other countries such as Yemen and Algeria have also felt the impact of the political shockwave that originated in Tunisia as well.
Porter Illi, a USU student who is studying Arabic in Morocco on a scholarship, witnessed many of the events firsthand.
“What I have seen and experienced today has been absolutely frightening,” he wrote in a journal entry he sent home to his family.
After completing an intermediate course in Arabic, Illi decided to take a short break. He said he settled on a trip to Cairo because the ticket was cheap and he wanted the chance to utilize his Arabic outside of Morocco. When he stepped off the plane, he was greeted by rows of tanks and burning buildings.
“The protests were far more devastating than what I had seen on the news in Morocco,” he wrote in his journal. He eventually evacuated on a flight to Istanbul. Despite the terrifying event, he remains undeterred. “I will be back,” he said.
While no one is able to tell what the ultimate outcome of the situation will be, Illi said it will have great externalities.
“Egypt is one of our most important allies considering their geographic location and their power within the region,” he said.
It is because of these factors, geography and regional influence, that many have feared a sudden spike in oil prices. Tony Triplett, who teaches a USU 1360 class on energy, said the Suez Canal, located in northeast Egypt, connects the Red Sea with the Mediterranean Sea. This allows safe and efficient transport of Middle Eastern oil supplies to the western world.
“Any instability in Egypt threatens the oil supply in the Middle East by threatening passage of the canal,” Triplett said. “Without it tankers would be forced to go down and around Africa, a much further distance through rougher waters.” She said whether or not the instability surrounding the canal creates any real threat to oil supplies is yet to be seen, but market prices are likely to fluctuate regardless.
“People who buy and sell stocks and do the market behaviors that lead to the price of oil are tied to perception,” Triplett said. “Any instability in areas around oil regions leads to nervousness in the oil market. Oil is one of the quickest markets to react to any possible change.”
While Triplett said it is highly unlikely that a shift in the Egyptian government will cause any dramatic changes in the functioning of the canal, she said such an event would cause a dramatic hike in oil and gas prices. It may even push us to seek fossil fuels from alternative sources such as the tar sands in northern Canada.
“A pipeline from Canada to the Gulf coast has been discussed recently,” she said. “Currently the simplest pipe connection was done to the pipes in Wyoming and Montana, meaning their only terminus is Salt Lake. There is a bigger source of oil there that could supply more if they had different pipeline hookups.”
Paying at the pump is not the only way that a spike in oil prices can hit citizens in the pockets. Chris Fawson, a USU professor of economics, said an increase in the price of oil can drive up the price of just about everything, right down to household goods and food.
“Oil is seen as a primary input in either production processes or the distribution processes,” he said. “The time a farmer spends on his tractor takes gasoline. Oil is embedded in the plastics necessary for packaging, and it takes fuel to transport goods and stock grocery store shelves. All of this affects the prices we pay at the store.”
Fawson agreed any jump in oil prices would have more to do with market perception than an actual disruption in distribution.
“Only 4 percent of global oil comes through the Suez canal,” he said. “The worry though is that the troubled markets in Tunisia and Egypt could spread throughout the Middle East, so people try to capitalize off of uncertainty in the market.”
– mike.burnham@gmail.com