Oil prices have rebounded since the overthrow of Egypt's President Morsi last month, but analysts dispute whether Middle Eastern turmoil is the real factor behind the rally, and how much further the commodity will rise — if at all.
(Read more: Scenes from the turmoil in Egypt)
Unrest in the country has rattled investors' nerves and raised concerns it could spark violence in neighboring oil-producing countries. In addition to the threat to Egypt's production, a major portion of the world's oil is shipped through the Suez Canal.
Brent crude oil traded at around $109.67 per barrel on Friday morning, up roughly 3.6 percent since Mohammed Morsi's ousting on July 3. Meanwhile, WTI oil has risen by around 6.0 percent and traded at $107.32 on Friday.
But despite the violence in Egypt, which has killed over 600 people and threatens to degenerate into civil war, Capital Economics said geopolitical instability was only a small factor in the recent run-up in oil prices.
"While supply outages elsewhere (including in Libya, Iraq and Nigeria) have played a part, we would be wary of attributing more than $2-$3 of this move to concerns about Egypt," said Capital Economics' head of commodities research, Julian Jessop, in a research note.
Jessop noted that at no point since the Arab Spring had there been any disruption in the flow of oil and gas through the Suez Canal or Suez-Mediterranean Pipeline, and said the Egyptian military, the U.S., and other regional powers such as Saudi Arabia, will likely ensure that none occur now.
"And in the unlikely event of major disruption, the U.S. and its allies could prevent a surge in oil prices by releases from their (ample) strategic reserves," he added.
(Read more: Egyptian army mobilizes ahead of protest)