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Well the clock is ticking in Cairo as president -- -- -- under pressure to resolve the political crisis -- by tomorrow's deadline that is being set by Egypt's military the -- driving oil prices to a nine month high.
Joining us now is global energy strategist can't -- a professor.
Is this as always thanks for joining us as we watched the -- perhaps the next chapter in the Arab Spring it appears in Egypt.
Why does this have an impact on oil prices it's.
By itself is not a big oil exporter but is it because it's.
Part of a big area of oil transit if you like of the Suez Canal -- got a little -- pipelines is this rise in prices justified.
Well -- number one Egypt you're quite correct aside from certain transit considerations is not a major producer of supplier.
The real problem here however really isn't Egypt at all.
As the instability intensifies in Cairo there are ripples that are being.
Felt throughout the broader region and there were having impacts that really are becoming disconcerting.
-- -- guys will begin to see the rise for the spike in prices.
In Europe as an almost direct consequence.
To give an example to things have been taking place over the last couple of days.
One is that protests have begun again and Libya and that actually is curtailing oil production and that has a direct impact on Europe.
But secondly is a situation that's taking place in the tiny country of Bahrain and Bahrain has no oil of any consequence it's a little island that -- out there in the Persian golf.
It is connected to eastern Saudi Arabia by a huge causeway the problem is that Bahrain.
Is she majority dominant.
And that eastern province in Saudi Arabia is a majority Shia.
In the -- you have a Sunni minority government and for the first time the Sunni Shia.
Religious difference is smack dab in the middle of the -- of the regional problems right if that spills over into Saudi production you have a real problem.
But the saudis but wouldn't you know the last time this came up in the unrest we sort of Bahrain the saudis actually said the tanks across like -- way.
To snuff out -- protests in Bahrain and by all accounts that's what's gonna happen again so he really expect any.
Problems in Saudi Arabia because they do with -- so swiftly and so forcefully.
They then you're quite correct actually they are probably better than any other nation on the face of the earth in terms of of domestic dissent.
But there are two things that are fundamentally different now.
As compared to the original -- -- in Bahrain way back in February of 2011.
Number one the opposition is far better organized.
And has far better networks outside of the country.
And number two it is very clear that Iran is providing support.
Both to the opposition in Bahrain and in the developing opposition in the eastern provinces of Saudi Arabia.
This is going to be a much more difficult thing for -- -- to deal with than last time and that uncertainty.
Even if there's no Civil Disobedience.
That uncertainty is going to be enough to drive up oil prices and so we're almost out of time get so -- at least talk about prices going -- how high could take.
Well I put a WTI cap of -- 105 dollars.
As a short term trading ceiling last week.
And I'm now increasing that to about a 113 dollars.
And we may be looking at a spike that's even higher.
In Brent we're seeing the compression of that spread between WTI and Brent but both of them are going north.
Well okay -- people very close on what's going on there in Cairo and elsewhere can malls with Duquesne University has a voice thanks so much.
Thank you actually --
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