Clotted Suez Canal spills worries about the World Trade

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The blockade of the Suez Canal, as a large container ship crashed on Tuesday morning, raises concerns about supply. Dozens of ships carrying crude oil, liquefied natural gas (lng) and other commercial goods could not sail through the canal on Wednesday. As a result, the delivery of the products is significantly delayed.

According to analysts of oil analysis company Vortexa alone, more than ten tankers with 13 million barrels of crude oil are fixed. Also a number of tankers loaded with lng can not pass. This could become many more if the blockade lasts even longer. Among other things, the problems caused oil prices to rise sharply, for fear of shortages.

According to the Suez Canal Authority, nearly 19,000 ships crossed the route in 2020. This amounts to an average of 51 to 52 ships per day. About 30% of global container traffic passes through the canal every day.

If the Ever Given remains stuck for up to 48 hours, the impact will be relatively limited. If the congestion lasts three to five days, World Trade will notice that, according to experts.

Due to the impact of the coronavirus crisis, the capacity of shipping between Europe and Asia was already under pressure. When the pandemic broke out, many ships were cancelled, leading to a shortage of containers. The crisis also brought down handling rates, affecting World Trade Volumes.

A dozen tugs try to pull container ship Ever Given, which is stuck in the Suez Canal, smoothly. The shortest shipping route between Asia and Europe has been blocked since Tuesday morning, after the huge ship crashed.

The Ever Given has a length of 400 meters and a weight of 224,000 tons. The ship ran aground in the southern part of the Suez Canal and lies diagonally across the entire width of the waterway, which is blocked by it. There was a large congestion of other vessels.

The 193 km long Suez Canal is one of the busiest shipping routes in the world, accounting for about 12 percent of global trade. Around one million barrels of oil and a large amount of liquefied natural gas (lng) are also transported through the canal every day.

When the Suez Canal is closed, ships must cross between Asia and Europe via the Cape of Good Hope, which may require weeks of additional sailing time. Oil tankers from the Middle East also make extensive use of the Suez Canal.

The Dutch Smit Salvage, a subsidiary of dredger and Maritime Service Provider Boskalis, has been engaged to help with the recovery of the ship. A team of 10 people has been sent to Egypt to help with the operation.

In such cases, “you really need to make calculations to understand how solid the ship is on the ground, and how much power you can exert without damaging the ship,” said a spokesperson.

According to the Suez Canal Authority (SCA), the work to detach the ship can continue until late into the night, weather permitting. Earlier it was wrongly reported that the ship had pulled smoothly.

According to Bernhard Schulte Shipmanagement (BSM), the ship’s technical manager, the ship’s crew is safe and there are no reports of pollution. According to BSM, the ship is owned by Shoei Kisen KK, Japan, but refused to provide further details. Shoei Kisen KK was not available for comment.

The Taiwanese Evergreen Marine, which leases the ship, said that the owner had said that the ship “was likely hit by a sudden strong wind, causing the hull to deviate from the route and accidentally hit the bottom.”The ship is probably insured for 100 to 140 million dollars, say Insurance Brokers.

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