Rising oil prices: Is it really all about Egypt?

Mosaab El-Shamy | AFP | Getty Images

A supporter of the Muslim Brotherhood and Egypt's ousted president Mohamed Morsi gestures during clashes with police in Cairo on August 14, 2013.

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.

(Read more: Brent rises, set for weekly rise on Egypt unrest)

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)

Jessop said the strength of oil prices could instead be explained by increased optimism about the world economy, as suggested by the concurrent rally in global equity markets since late June.

"A sharp fall in U.S. crude stocks has bolstered hopes of a strong recovery in oil prices too," he added.

Tom Essaye, founder of the 7:00's report, agreed that Egypt was not the major factor in oil's rise.

"Egypt isn't really that much of an issue and I don't think that it will result in a substantial increase in the geopolitical risk premium in oil, unless other Middle Eastern/Gulf countries get involved and back the Muslim Brotherhood. As usual, the concern is about the spread of uncertainty," he told CNBC.

Instead, Essaye said oil prices were currently driven by economic data, with traders eagerly eyeing every number out of the U.S. for insight into when the Federal Reserve might start tapering back its stimulus program.

"The geopolitics should pay second fiddle to the data and the Fed, unless, as mentioned, we see other countries get involved… Much more so than geopolitics at the moment, I think oil is data-driven, with Brent having an easier path higher than WTI at the moment, as current growth rates are prices into WTI at these levels," he said.

However, Lothar Mentel, the chief investment officer of Tatton Investment Management, said that Egypt was a significant element behind the oil price rise, at least in the short-term.

"I think the Suez Canal and the increase in geopolitical uncertainty is driving the oil price in the short-term. I hope very much the oil price will fall again because I am concerned about what will happen in Egypt. I think we will have quite a choppy day today," he told CNBC.

Analysts also disagreed about the direction of oil prices in the near-term. Preliminary results from a CNBC survey found that 11 out of 16 analysts forecast oil price gains next week, four expected losses, and one was neutral.

Jessop was in the bears' camp. "Even in the near-term, oil prices are vulnerable to any renewed jitters in financial markets over the prospects for U.S. monetary policy or China's economy, and to concerns about what high oil prices themselves might mean for demand," he said.

—By CNBC's Katy Barnato