Israel may be considering its energy options after a pipeline bringing gas from Egypt suffered four attacks in the space of five months.
This link provides Israel with 40 per cent of its gas and the most recent explosion, which took place at a monitoring station near the Egyptian town of Al-Arish, was the second incident in as many weeks.
Much has been made of the nervousness with which Israel is watching events in Egypt. The peace treaty signed between the two countries in 1979 makes the relationship one of the most important regional alliances for Israel in the region, and Israel fears that a revolution could see the Egyptian government fall into the hands of Islamic fundamentalists.
Egypt may not be among the Middle East’s significant oil producers, but the country’s turmoil has placed upward pressure on oil prices nonetheless.
The most important explanation is the market’s fear that Egypt’s revolution may spread to the rest of the region. But there is also a secondary concern about the security of important transit routes across Egyptian territory.
The Suez Canal is not as important for crude oil supplies as might be thought. According the most recent figures available from the Suez Canal Authority, only 573,000 barrels per day passed through the Canal in 2009, less than half the figure for 2006.
BP marked a return to the deep water today – in Africa.
Seven months after its accident in the deep waters of the Gulf of Mexico, the UK oil group announced it has made a significant discovery in the deepwater West Nile Delta area in Egypt.
The Hodoa discovery – Hodoa means ‘horseshoe’ – is located in the West Mediterranean Deepwater, some 80km northwest of Alexandria. The WMDW-7 well was drilled to a depth of 6350m and is the first Oligocene Deep Water discovery in the West Nile Delta area.