The US Secretary of State John Kerry visited Egypt in early November and officially announced that US will cut military aid to Egypt. The announcement had been mentioned few months back but the US official reiterated on just one day before the trial began on Egypt’s former President Mohamed Morsy.
Though analysts could see this as an attempt to salvage the former President Morsy, Kerry emphasised that the policy was not a punishment but rather an action to push for reforms within Egypt’s government.
Since the ouster of Mohamed Morsy in July, Egypt has undergone massive civil unrest and fervent protests from the public. Till now, Morsy is the first ever democratically elected leader in Egypt and has led the Muslim Brotherhood as strong political party in parliament.
Following the ouster, hundreds of party’s members were killed or arrested, while Morsy and his party leaders were imprisoned. In September, Egyptian court banned the Brotherhood and its associations and ordered their assets to be seized.
Being overthrown in end June by the military junta, Egypt has been run by provisional government for past few months. The alliance of US military venture with the former Egyptian government has been a popular synergy to safeguard the security and trade interest along Red sea. But now, the estranged feelings with the new provisional government may not be envisioned as equal ground in-light of different political objectives.
The US has always been ambitious to be involved in the oil economy among Middle East and Gulf territories. Since the collapse of Muslim Brotherhood, US government has halted the cash transfer of US$260 million to Egypt, and supporting the large scale weapons including fighter-jets, tanks, war helicopters and anti-ship missiles.
In November, Kerry’s visit to Egypt was the first time and also sat on highest level in drawing international attention. Despite cutting all military aid to the ‘allied force’, US stressed on the eagerness to maintain mutual relationship with Egypt but with no more money to be chipped in!
In Egypt, media analysts expect the imminent riot of protests could break out soon as supporters for former president Morsy begin to gather in Tahrir square for demonstration. The impact could spread to wider scale and re-ignite the Arab Springs into viral fires.
Termination of lending monetary aids from US might shave the political power of current provisional government, which eventually could land on more drastic situations if trade scuffle is risen in Red Sea.
Red Sea is an important channel for daily oil supplies coming out from Sudan, Saudi Arabia, Egypt, Jordan to the world.
The last estimated figure of daily supplies crossing through this channel amounted 3.4 million barrels in 2011. Perhaps, the data may be moving to near four million barrels on daily basis in today’s economy.
We shall stay observant to the political situation of Egypt over the coming few months. If the chokepoint along Red Sea is affected due to the political rout that cannot be quelled, there could be a short-squeeze in crude supply and trigger rapid demands from the global markets. Hence, seeing an ease in war-tension in Syria now may be just temporary for bearish sentiment in crude prices before the Egypt’s rout emerges again.
Dar Wong is the principal consultant of APSRI. The expressions are solely his own. He can be reached at [email protected].