The Suez Canal “’ no
disruptions yet in
oil or gas traffic
 
Davos, Switzerland — ESI-AFRICA.COM — 02 February 2011 – The unrest in North Africa that has forced BG Group plc and Statoil ASA to stop drilling threatens a region that represents more than 15% of Europe’s natural gas supply and 4% of the world’s crude oil.

No disruptions to gas pipeline shipments under the Mediterranean Sea or to oil tankers through the Suez Canal have been reported so far in North Africa, after popular unrest erupted last month, but Bloomberg News reports that concern has pushed Brent crude oil to more than US$100 a barrel for the first time since 2008.

Algeria “’ the third-largest gas supplier to Europe “’ last month suffered riots over food prices similar to those that kicked off a broader protest in Tunisia and toppled President Zine El Abidine Ben Ali on 14 January. In Egypt, President Hosni Mubarak is trying to contain protests and extend his 30 years in power, about 10 years less than neighbor Muammar Qaddafi has held sway in Libya.

“It’s especially southern Europe that’s exposed to a supply halt from Algeria and Libya,” said Thina Saltvedt, an analyst at Nordea Markets in Oslo. “As Europe’s third-largest gas supplier, unrest in Algeria would especially put southern Europe’s security of supply to the test.”

Algeria and Libya combined export about 70 billion cubic metres of gas, or about 15% of the EU’s annual consumption. The two members of the Organisation for Petroleum Exporting Countries also pump a combined 2.8 million barrels a day of crude, according to data compiled by Bloomberg. Egypt pumped 742 000 barrels of crude a day and 62.7 billion cubic meters of gas in 2009, according to BP plc data.

Egypt’s Suez Canal is the main artery for shipping more than 2.2 million barrels of oil a day headed for Europe and North America. Last year 368 liquid-natural gas vessels also went through the Suez to the Mediterranean carrying 30.3 million tons of the fuel, according to Pan Eurasian Enterprises Inc.

Egypt produces about 3% of the world’s LNG, and any supply disruption will certainly impact the balance of the European gas market, potentially putting upward pressure on natural gas prices,” Bank of America Merrill Lynch analysts said in a report this week.