A man sends a Twitter message in Cairo and now we’re paying around $1.26 for a litre of regular gas.
The current tumult in the Middle East, sparked by the so-called Twitter Revolution in Egypt, is prompting fear-mongering by commodities speculators and boosting the bank accounts of major oil companies.
Egypt is a middle-of-the-pack supplier of the world’s oil. Its daily production of about 680,000 barrels ranks it 29th amongst oil producers. That’s 11 spots below Libya, but eight higher than Yemen, 25 higher than Tunisia and 44 higher than Bahrain, the other countries where citizens, emboldened by the successful occupation of Tahrir Square, have been marching against the status quo.
Combined, they produce less oil per day than Canada, ranked sixth at 3,289,000 barrels, and less than a third of the daily oil production of the United States.
In fact, the U.S., the world’s biggest consumer of oil, gets less than 20 per cent of its imported supply from the Middle East. Some key delivery points have more oil than capacity to move it. Refineries have cut back operations because of the oil glut.
But never let reality get in the way of a good old speculative panic. Some analysts say if the current Middle East unrest continues, or spreads to more countries, the price of a barrel of oil could reach new heights, surpassing the records set three years ago, the last time we were paying this much at the pump. That’s also the year the world’s largest publicly traded oil company, Exxon Mobil, pocketed a record profit of $45.2 billion.
Of course, this anxiety about the rising price of oil fuels fears for the rest of the economy.
As gas goes up, so goes the price of food and everything else we consume that gets to us by truck, train, plane, or is manufactured with plastic.
It’s almost enough to make you want to curl up in a corner with the lights off, Twittering on your iPhone.