WASHINGTON — The turmoil in Egypt is causing economic jitters around the globe, pushing up food and oil prices so far, but bigger worries are ahead.
Will popular uprisings and revolution spread to Egypt’s rich autocratic neighbors, managers of much of the world’s oil supply? Will the U.S. see its influence in the region decline and that of Iran and other fundamental Islamic governments surge? While those are open questions, there is no doubt the crisis has meant new risks for shaky economies and put a cloud over financial markets.
Instability in the Middle East, if prolonged, could jeopardize fragile recoveries in the United States and Europe. It could limit job creation and fuel inflation.
“If the turmoil is contained largely to Egypt, then the broader economic fallout will be marginal,” said Mark Zandi, chief economist at Moody’s Analytics. “Now, obviously, if it spills out of Egypt to other parts of the Middle East, the concern goes to a whole other, darker level.”
Protesters have toppled the government of Tunisia, with more modest effects in Yemen and Jordan.
“The real worry, I think, is if these protests continue indefinitely and there isn’t more reassurance about stability in Egypt and in the broader region,” said Shadi Hamid, a researcher on Persian Gulf affairs at the Brookings Institution’s Doha Center in Qatar. “We’re going to see a continued decline in the regional economy, and that will, of course, have an effect on the U.S. economy.”
The unrest already has affected U.S. energy prices. The average price for a gallon of regular gasoline in the U.S. was $3.12 on Friday — up 2.4 cents just in the past week.
Traders worry the unrest might affect shipments through the Suez Canal. Egypt is not a major oil producer, but it controls the canal and a nearby pipeline that together carry about 2 million barrels of oil a day from the Middle East to customers in Europe and the United States. So far, traffic through the canal has been unimpeded.
Rising food prices helped fuel the popular uprising in Egypt. Unrest in Somalia and other Arab nations also appears to be driving food prices even higher.
