The story following comes directly from Reuters:
There is enough spare shipping capacity worldwide to move 4 million to 5 million barrels per day of oil if protests in Egypt shut down the Suez Canal and the country's major pipeline, the head of the U.S. Energy Information Administration told Congress Thursday.
Continue Reading Below
Egypt has been wracked by weeks of protests over the continued rule of Hosni Mubarak and workers this week went on strike at companies owned by Suez Canal authorities.
But so far the waterway has not been affected.
"The increase in tanker requirements traffic would be modest in the context of current global oil shipment flows," EIA Administrator Richard Newell told a congressional hearing on the possibility of a shutdown.
About 3.1 million bpd of oil and refined petroleum products are shipped through the Suez Canal and Egypt's SUMED pipeline, according to Newell.
The 200-mile (322 km) SUMED pipeline moves petroleum north through Egypt from the Red Sea to the Mediterranean Sea.
Newell said about 45 million bpd of oil is shipped on the world's waterways, with a spare capacity of roughly 10 percent, or 4 million to 5 million bpd.
"Our contacts in the tanker community suggest that the tanker market remains relatively relaxed," he told members of the House Energy and Power Subcommittee.
Newell said it would take longer to get the oil to its designated markets if the canal and pipeline closed because tankers would have to travel an extra 6,000 miles (9,656 km) around the southern tip of Africa, which would add 12 days of travel.
However, a disruption in oil shipments through the Suez Canal or SUMED pipeline would not add much to costs. "Tanker costs from the Persian Gulf to the Gulf of Mexico generally fall within the range of $1 to $2 per barrel, so even a major increase in tanker rates would have little impact on delivered oil prices," Newell said.