Public and private sectors wary of impact on oil
Thailand’s public and private sectors are monitoring the political turmoil in Egypt for signs that it could escalate into a crisis that would jack up oil prices and create more risks for the global economy, but hold high hopes that the unrest will be brief.
Egypt’s army was yesterday holding the country’s first democratically elected president, Mohamed Morsi, in detention, hours after abruptly forcing him out of office following days of deadly protests against his turbulent rule, according to Agence France-Presse.
The chief of Egypt’s highest court, Adli Mansour, was later sworn in as interim president, the official Middle East News Agency reported.
The military coup in Egypt will likely affect oil prices in the near term, said Suthep Liumsirijarem, director-general of the Energy Policy and Planning Office (EPPO). However, in the worst-case scenario – a civil war – there would be severe impacts on global oil prices.
“There would be hoarding and speculative trading. Oil prices would increase US$5 to $10 [or Bt155-Bt310 per barrel]. But the chance for [that] is less than 10 per cent,” he said.
The EPPO was assessing the situation in Egypt for any impacts on Thailand.
“In case of a civil war, we will invite all other agencies involved to discuss measures to be taken in response.”
The Bank of Thailand is worried about disruption of transportation routes from major crude-oil producers like Saudi Arabia and others in the Middle East, senior director Methee Supapongse said.
“We will need to monitor the situation first. If the transportation routes are not affected, it would have no impact on oil prices,” he said.
The central bank has forecasted 2013 inflation at 2.8 per cent, assuming Dubai crude oil averages $105 per barrel. Inflation in the first six months ran at 2.7 per cent.
On Wednesday, US oil prices settled above $100 a barrel for the first time in more than a year, hitting a 14-month peak on concerns that the political crisis in Egypt could affect the rest of the Middle East and disrupt global supplies.
Gold prices also went up on the situation in Egypt and resignation of two more ministers in Portugal. Spot gold gained as much as 0.4 per cent to $1,258.35 an ounce and was at $1,255.15 by 1.57pm yesterday in Singapore.
Foreign Minister Surapong Towichukchaikul said the Thai Embassy in Cairo would be prepared to evacuate Thais living in Egypt, if necessary. About 2,000 Thais live in the country, mostly students.
Thais in Egypt should avoid mass gatherings to reduce risks, Surapong said, adding that there have been no reports of any Thais being harmed.
All of the some 200 Thai workers in Egypt were reported safe, said Pravit Khiengpol, director-general of the Employment Department. The department was closely following developments in Egypt and would arrange to bring the workers home if the situation becomes dangerous.
The Foreign Ministry called on all the parties in Egypt’s political confrontation to solve their differences in a democratic manner, deputy spokesman Jakkrit Srivali said.
There have been no indications that an evacuation of Thais living in Egypt would be necessary in the near future. The ministry’s officials have advised Thais to stock up on food and bottled water to prepare for an emergency, he said.
Opposition leader Abhisit Vejjajiva said the Thai government should take the latest power seizure in Egypt as a lesson of what can happen in developing democracies where rulers exceed the legal limits of their authority.
“In really democratic countries, the elected rulers are aware of the legal limits and their scope of legitimacy,” said Abhisit, who is the Democrat Party leader.