Transcript Globalization

Globalization
Trade Routes in the Middle East
and the relationship to US gas
prices…
First of All, Where?
Sinai Peninsula
Suez Canal
A Little History First, YAY!
• At least as early as 1300 B.C.
the Egyptians built a
navigational canal linking the
Red Sea with the Nile River,
and indirectly with the
Mediterranean Sea. It was
used off and on for more than
2,000 years before being
permanently abandoned in
the eighth century A.D. After
1500, Europeans revived the
idea of an Egyptian canal as
a means of eliminating the
long voyage around Africa.
Nothing was done, however,
until the early 19th century
when surveys were made.
Key Players
Gamal Abdel Nasser
Suez Canal War of 1956
How it Began…
• The canal represents the only direct means of travel
from the Mediterranean to the Indian Ocean, making it
vital to the flow of trade between Asia, the Middle East,
Europe, and the U.S. Normally, free passage was
granted to all who used the canal, but Britain and France
desired control of it, not only for commercial shipping,
but also for colonial interests. The Egyptian government
had just been taken over by Gamal Abdel Nasser, who
felt the canal should be under Egyptian control. The
United States and Britain had promised to give aid to
Egypt in the construction, this aid was retracted however,
and in retaliation Nasser nationalized the canal. He
intended to use the funds raised from the operation of
the canal to pay for the Dam.
This Didn’t Go Over Well…
• War broke out…
– Angry British and French politicians joined forces
with Israel, a long time enemy of Egypt, in an
attack against Nasser.
– Israel and Egypt were enemies because of beliefs, land, political policies…
Will It Happen Again?
• Israel surrounded by
enemies…
– Lebanon: Leader backed by
Hizbullah
– Syria: Friendly with Iran and
backed by Hamas
– Iran: Angry, gaining nuclear
weapons?
– Jordan: Ruled by
monarchy…
– Egypt: Peace Treaty (US
Help) from 1979 – very shaky
– Turkey: Relations from “cool
to icy”
And Don’t Forget Where the Oil is
Located…
Suez Canal 2011
• Israel closely watch the movement of
Iranian warships were reported to cross
the Suez Canal, Egypt, to Syria through
the Mediterranean Sea. This situation
makes the world crude oil price
increases because of market participants
worry over the potential conflict in the
Suez Canal, which is one of the strategic
distribution channels.
Suez Canal 2011
• CNN news station reported, the price of crude oil
for March in the distribution of transactions in
New York trading Wednesday afternoon local
time rose 1.2 percent to U.S. $ 85.95 per barrel.
In the UK stock exchange, Brent crude oil price
rose 2.1 percent to U.S. $ 103.31 per barrel.
• Andrew Lebow, analyst at MF Global, urged the
traders to remain vigilant due to developments in
the Suez Canal is still unclear.
The Strait of Hormuz – What?
• The Strait of Hormuz is a narrow, strategically
important waterway between the Gulf of Oman
in the southeast and the Persian Gulf.
• It is the only sea passage to the open ocean for
large areas of the petroleum-exporting Persian
Gulf. About 15 tankers carrying 16.5 to 17 million
barrels of crude oil pass through the strait on an
average day, making it one of the world's most
strategically important choke points. This
represents 40% of the world's seaborne oil
shipments, and 20% of all world oil shipments.
Where?
Conflicts…
• April 1988
– Operation Praying Mantis
• July 1988
– Downing of Iran Air Flight 655 – Still controversy
• December 2007 – January 2008
– Iran harasses and provokes US Naval ships?
• June 2008
– Iran threatens to seal off Strait of Hormuz if US or
Israel attacks…
– Conflict to re-open
• July 2008
– Operation Brimstone (prep for war)
• August 2008
– 5 battle groups show up (Ready for a Rumble…)
Straight of Gibraltar
Morocco – US Relations
• “We are delighted with
our strategic partnership
with the United States of
America…and we are
particularly keen to
consolidate and
diversify our partnership
relations.”
H.E. King Mohammed VI, “Throne
Day” Speech, 30 July 2004
2004 US – Morocco Free Trade
Agreement
• The most recent of
many official
measures that
have helped to
cement the longstanding and
always cordial
relationship
between the
United States and
the Royal Kingdom
of Morocco.
President George W. Bush talks with His Majesty King Mohammed VI of
Morocco in the Oval Office Tuesday, April 23. "Today, I've informed His
Majesty that our government will work to enact a free trade agreement with
Morocco," said the President to the media. "Trade is an important part of
good foreign policy, it's an important part of making sure Americans can find
jobs." White House photo by Eric Draper.
Allies
• When Morocco finally gained independence on
March 2, 1956, President Dwight Eisenhower
sent a congratulatory message to King
Mohammed V: “My government renews it wishes
for the peace and prosperity of Morocco, and
expresses its gratification that Morocco has
freely chosen, as a sovereign nation, to continue
in the path of its traditional friendships.”
Allies Continued
• In the 21st century, both countries have become
close allies in the global war on terror. After the
September 11, 2001 attacks, Morocco shared
valuable information with the United States
about al Qaeda. Conversely, when Casablanca
was the victim of terrorist bombings on May 16,
2003, the U.S. government offered Morocco –
one of it oldest allies -- the full resources of its
military and intelligence community.