By Aaron Smith
NEW YORK (CNNMoney) — Oil prices reached their highest point in more than a year Friday, driven by anxiety over a military coup in Egypt.
U.S. oil futures for the August contract rose $1.98, or nearly 2%, to settle at $103.22 a barrel. That’s the highest closing price since May 2, 2012, when oil settled at $105.22 per barrel.
The Egyptian army seized control of the government Wednesday amid violent protests, deposing the country’s first democratically elected president, Mohamed Morsy of the Muslim Brotherhood. On Friday, the African Union announced that it was suspending Egypt.
Egypt produces a negligible amount of oil. But the Suez Canal, which passes through the north African nation, is a major thoroughfare for oil shipping that links the Mediterranean Sea with the Red Sea and the Persian Gulf.
“I think most folks don’t believe that violence in Egypt is going to cause a shutdown of the Suez Canal,” said Tom Kloza, chief oil analyst for Gasbuddy.com.
But he also said that military coups make traders nervous about energy supply, prompting them to buy oil and drive up prices.
Oil was on the rise even before the Egyptian coup. Oil prices have climbed more than 8% in the last month, driven by economic growth.
Brent crude, the benchmark for oil prices in Europe, rose $1.67, or 1.6%, to $107.43 a barrel.