A large container ship on Tuesday this week blocked ship traffic in the Suez Canal after getting stuck sideways within the canal. According to media reports from the scene, attempts to dislodge the ship are still ongoing.
The man-made Suez Canal connects the Mediterranean Sea to the Indian Ocean via the Red Sea. The waterway enables a direct route for shipping between Europe and Asia, allowing for passage from the North Atlantic to the Indian Ocean.
Most importantly, the waterway is crucial for international trade given that 12% of global trade goes through the canal according to Bloomberg.
Suez Canal; What’s at stake
On Wednesday, oil prices rose by as much as 5% due to concerns over supply disruptions due to the ship traffic caused by the blockage. The canal is considered one of the potential chokepoints in oil transit.
The vessel has been blocking the entirety of the critically important passageway as more than 50 ships per day pass through the Suez Canal, including an estimated 10% of all seaborne oil trade, the equivalent of up to 3 million barrels of crude per day.
Lloyd’s List, one of the world’s oldest shipping news and intelligence journals, estimates that a total of $9.6 billion per day may be halted in ship traffic due to the blockage.
“Containerised goods represent around 26% of total Suez traffic and in value terms, delays will be significant. Rough calculations suggest westbound traffic is worth around $5.1bn daily while eastbound traffic is worth $4.5bn.” Lloyd’s List says in a note on its website.
The Suez Canal Authority announced on Thursday it had “temporarily suspended” navigation through the waterway until the large container ship is removed. The authority released new pictures of efforts to dislodge the stranded container vessel.
The Suez Canal Authority also said that rescue teams on Thursday resumed their efforts to dislodge the stranded container vessel, but experts believe their best chance may come as late as Monday when the tide reaches its peak.
If those efforts fail, the blockage may last until the next tide which won’t be for another 12 to 14 days. The Financial Times reported on Thursday that rescuers warned that removing the blockage could take “weeks”, raising fears of massive disruption to global trade.
