Can consumers expect a change at the pump if current protests in Egypt lead to a shutdown of the Suez Canal — one of the busiest sea lanes in the world? Not really, Goizueta’s Ray Hill told WXIA-TV in Atlanta.
Hill, an assistant professor in the practice of finance, specializes in energy economics.
“Only about two and a half percent of the world’s production or consumption, daily consumption, passes through the Suez Canal,” Hill told WXIA. “Even if it were shut down for a long period of time, it would still have only have a temporary effect on oil prices until the routes were changed, and add a few more cents to a barrel of oil delivered to the United States, but not a lot.”
Hill added a bigger factor on oil prices is rising demand in countries like China.
The professor said if the canal were taken over by a rebel faction or shutdown for another reason oil producing countries would simply get their product to market by taking the “long way” around Africa and into the Atlantic Ocean.