Egypt Turmoil Causes Converns for Investors

By on February 11, 2011 at 9:40 am

Unrest in Egypt has lasted for over two weeks. Oil prices have risen at the pump slightly because of the uncertainty in the region. Although the protests used minimal violence compared to similar uprisings, the uncertainty of the government has caused investors to wonder about the wisdom of keeping their money in the air.

Although viewers react to the news with mixtures of surprise and fear, the stock markets and exchanges have shown little if any reaction. Egypt is starting to become a major player on the world financial stage, and one that investors should be concerned with, according to the Financial Times.

The stability of the country and the amount of oil that flows through it can also impact all areas of the Western Economy, particularly if fuel prices rise too far above their current levels. Investors have shown no signs of moving their investments out of the Middle East in the wake of violence.

Last week’s announcement that top members of the Mubarak regime would resign caused the fears of unrest to ease, but protests still continued in the streets. The Egyptian people do not want Mubarak to remain in power and the military has not yet managed to reassert control over the country’s towns and cities.

The Persian Gulf does not supply as much of the world’s oil as it once did. New drilling sources have reduced international dependence on the middle East. Developing nations have faced an increased demand for oil and could send the prices skyrocketing again, although analysts do not expect a repeat of the oil crises of the 1970s. If the region becomes unstable and the Suez canal becomes controlled by more radical Muslim groups, the unrest in Egypt could create a problem for investors and businesses as the costs of getting the fuel they need rise.

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