THE SUEZ CANAL--ITS ECONOMIC SIGNIFICANCE

This study of the Canal's economic significance to the United States and the Free World Demonstrates that the direct economic cost of the Canal's closure is estimated for 1971 alone to be on the order of $3.4 billion--a cost to be paid by the world's consumers. Should the Canal remain closed, the cost can be expected to reach $5 billion. Focusing on the rapidly increasing demand for energy fuels which the developed nations must have if their economic growth is to proceed, the study discusses possible alternative sources of energy and concludes that petroleum will continue to be the chief source of energy for the foreseeable future. The potential of Western Hemisphere sources of crude oil are evaluated with the conclusion that greater imports of Eastern Hemisphere petroleum will be required if the United States is to meet its energy requirements. The closure of the Suez Canal has exacted a huge economic cost to the world community, a cost which can only increase in the future. Furthermore, it is a cost paid mainly by the Free World community since, in 1966, the last full year of operations before the Canal's closure, 93 percent of normal Canal traffic was in Free World transits. "The seven percent of Communist bloc usage scarcely balances, much less overcomes, the advantages which would accrue to the United States, Europe, and the developing nations from the waterway's resumed operation." The study highlights how the Suez Canal, together with supertankers and pipelines, existing and planned, will continue to be a major artery for the transport of the vast quantities of crude oil necessary to meet the energy requirements of Europe, Japan, and the United States in the next two decades. (Author)

  • Corporate Authors:

    American-Arab Association for Commerce & Industry

    505 Fifth Avenue, Suite 1701
    New York, NY  USA  10017
  • Authors:
    • Mallakh, R E
  • Publication Date: 1971-5

Media Info

  • Pagination: 16 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00052023
  • Record Type: Publication
  • Source Agency: Institute of Public Administration
  • Files: TRIS
  • Created Date: Apr 26 1974 12:00AM