With Military Takeover, What Now for Egypt?
The military ouster of Egyptian President Mohammed Morsi will likely have ramifications far beyond the ancient country's borders, potentially affecting the balance of power in the Middle East, the influence the U.S. can wield in the region and the worldwide price of oil.
"Egypt sits at the center of the Mideast," said Joel Rubin, a former State Department desk officer for the region. "Cairo is the leading city in the Arab world ... and Egypt's government has always had a dominant role over the politics of the region."
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Egypt is "in many ways the most important country in the Middle East," said Isobel Coleman, a senior fellow at the Council on Foreign Relations, with the "biggest population, the largest economy and a geographically critical location. ... If it turns into a terrible, bloody civil war, it's just bad for the whole region. It destabilizes the entire region."
Here's a look at how Rubin, Coleman and other experts see things playing out:
What happens next
Adly Mansour, 68, chairman of the Supreme Constitutional Court, takes over as acting president during an unspecified transitional period. The military suspended the Islamist-backed constitution and said it hoped for early elections; before the ouster, Egyptian military officials reassured Washington that they had no stomach for ruling the country themselves, U.S. officials told NBC News.
In the next 24 to 48 hours, the U.S.'s crucial task is to "maintain an open channel with the head of the Supreme Forces of Egypt," said Marc Ginsberg, a former U.S. ambassador to Morocco and senior White House adviser for Middle East policy.
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"The State Department is probably going to dispatch [Defense] Secretary [Chuck] Hagel or Secretary [of State John] Kerry to the region or both to take a temperature of how willing the military is to turn over power," he told MSNBC.
While the U.S. State Department is removing non-emergency embassy personnel and approved family members from the country, the U.S. ambassador, Anne Patterson, will stay, at least for now.
About 550 U.S. Marines are on standby at Naval Air Station Sigonella on the Italian island of Sicily and at Morón Air Base in southern Spain. Defense officials told NBC News on Wednesday evening that no decision has yet been made on whether to send them to Cairo.
More From NBC News:
Egyptian Military Says It Has Ousted Morsi; Crowds Celebrate in Cairo
With Morsi Toppled, Egypt Remains US Strategic Worry and Destination For Aid
Key Players In the Egyptian Crisis
In the Short Term
Expect a loud debate over whether what happened Wednesday in Cairo was or wasn't a "coup." It might seem like mere semantics, but it's actually a critical determination.
U.S. law bans military or financial assistance "to the government of any country whose duly elected head of government is deposed by military coup or decree." At the same time, Washington's biggest lever of influence over Cairo is the $1.5 billion in aid it sends Egypt each year.
"Obviously, the administration faces a difficult decision in terms of how to interpret what's happened," said P.J. Crowley, former chief spokesman for the State Department.
"But there's some flexibility here. If these events move Egypt forward towards a deeper, a more inclusive democracy, I think the administration may interpret events one way," Crowley said on MSNBC's "Hardball." "Obviously, if the military takes over and it has the trappings of an autocratic state, even for a temporary period of time, that will have different implications."
President Barack Obama was unable to clear things up in his statement on the day's development, saying only that he had "directed the relevant departments and agencies to review the implications under U.S. law for our assistance to the Government of Egypt."
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Oil prices — which rose for the third straight day Wednesday, with U.S. crude hitting a 14-month high of $101 a barrel — are likely to keep going up, at least for the next few days, before eventually settling down.
"There is always a significant risk premium built into the price of crude based on the tumultuous political nature of the Middle East," Jim Iuorio, managing director of TJM Institutional Services, an independent futures brokerage, told CNBC.
"Egypt is not a huge oil producer, but it is important to the oil market because of its proximity to key shipping lanes," Iuorio said.
The Suez Canal Authority said in a statement that it didn't expect the 2.4 million barrels of oil that transit through the canal each day to be disrupted.
But John Kilduff, founding partner of Again Partners, a New York investment firm specializing in energy trading, disagreed, saying the upheaval was probably worth an extra $5 a barrel.
"I'm putting my money on the military to take control of the Suez Canal and make sure pipeline asset is secure," Kilduff told CNBC. He said he could see prices falling under $100 a barrel only if "the military takes control."
Asked about the potential threat to the canal, Defense Department press secretary George Little said, "Our assumption is the Suez Canal will remain open."
In the Long Term
Egypt and Israel are the U.S.'s partners in a 34-year-old peace treaty, and the biggest threat from Wednesday's events is the survival of that accord, officials and experts said.
"Like everybody, we are watching very carefully what's happening in Egypt," Israeli Prime Minister Benjamin Netanyahu told the Italian newspaper Corriere Della Sera. "Remember that for 30 years now, we have had an anchor of peace and stability in the Middle East, and that was the Egyptian-Israeli peace treaty. We hope that peace will be kept."
It's not just the tenuous truce that's at risk. Without a stable Egyptian government helping to oversee interception efforts, more arms could be smuggled into the hads of the militant Islamist Hamas government in Gaza.
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"Turmoil in Egypt certainly has repercussions for Israel," said Coleman, of the Council on Foreign Relations. "One is that if the state is in disarray, it's very hard to protect the border with Israel.
"The Morsi government has struggled with the [smuggling] tunnels, rebel activity, arms smuggling — all sorts of things. They have done their best in many ways to shut that down," and now that government is gone, she said.
Ginsberg, the former ambassador, said the Obama administration had already been having "an extraordinarily difficult time navigating the changes that have taken place" since the Arab Spring of 2011, and Morsi's departure "could well create circumstances where Hamas says all bets are off."
"What are Hamas and other terrorist organizations going to do inside the Gaza Strip now?" he asked.
