Globalization

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Globalization

• Trade Routes in the Middle East and the
  relationship to US gas prices

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First of All, Where?
Sinai Peninsula
Suez Canal
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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.

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Key Players
Gamal Abdel Nasser
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Suez Canal War of 1956How 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  construction, this aid was retracted however, and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.

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This Didnt 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

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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

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And Dont Forget Where the Oil is Located
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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.

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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.

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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.

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Where?
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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)

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Straight of Gibraltar
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Morocco US Relations

• We are delighted with our strategic partnership
  with the United States of Americaand we are
  particularly keen to consolidate and diversify
  our partnership relations. H.E. King Mohammed
  VI, Throne Day Speech, 30 July 2004

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2004 US Morocco Free Trade Agreement

• The most recent of many official measures that
  have helped to cement the long-standing 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.
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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.

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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.