US and the Egypt-Libyan crisis

The recent international news broadcasts have been dominated by reports about unrest in Egypt and Libya, where the common people are fed-up with the autocratic rulers and are demanding change. The existing rulers have been universally condemned in the strongest terms possible, with possible economic sanctions to be imposed by the UN, However, it is the reaction of the US which is most interesting.

While the Egypt crisis was unfolding, US refused to be drawn towards the issue. Only when the protests became serious, it sought the following stance of, "An orderly transition, which must be meaningful, peaceful and must begin now". Only when a revolution was imminent, US began to actively involve itself in the crisis. US may want the voices of the people of Egypt to be heard, but its greater worry was the Suez Canal. This canal, the bloodline of US economy, is essential for US to survive. Many of its imports, specially crude oil require access to Suez Canal. Us also needs unrestricted access to canal in case of a military emergency. US was exceedingly worried that the rebels may take over the Suez Canal, and shut it down. That would have spelled doom for US. With no oil and have of the imports stuck in the Red Sea, US was a goner. It was vital that the transition of power in Egypt be peaceful, so that Uncle Sam does not feel the economic pinches of import shortages.

One crisis averted, other crops up. Libya is one issue, which might potentially hasten US's tumble from the top of the economic charts. Libya is a key crude oil producer and any unrest in the country would harm the country's oil production. As supply falls, prices are bound to rise. If the prices of oil stay inflated for a significant duration, it could possibly derail US's progress back to economic health. Still reeling from Recession, high prices pushed by spiked oil rates would reduce the purchasing power of the economy and discourage investments, which the country desperately needs to turn the corner.

It is exceedingly crucial for US to control this situation, minimize damage and restore faith in the oil market to keep inflation low. Should Uncle Sam fail in this task, he might as well give up his tag of "Economic SuperGiant".