Suez crisis: Shipping, trade in troubled waters

Dubai - The blockade has left no less than 15 other vessels stuck.

The Suez Canal, one of the busiest waterways worldwide, is facing a significant blockage following the halting of a large vessel.

Problems on the high seas

According to reports, authorities have been working for the past two days to free up the canal’s pathways after the Ever Giver — a 59-metre-wide vessel — ran aground following a sandstorm and heavy winds. The Suez Canal Authority explained that the ship, which sailed under a Panamanian flag, was on her way to the port of Rotterdam in Holland when she was suddenly knocked off course.

Currently, the Ever Giver is positioned across the vital canal through which a significant number of ships must usually pass. According to a statement by the authority, the route transports about 33 per cent of all global container shipping globally. Almost 19,000 ships passed through the canal last year, with an average of 51 ships a day.

So far, the Ever Giver’s blockade has left no less than 15 other vessels stuck. Until the blockage is cleared, these vessels will be unable to move through. Officials have stopped all ships from entering the canal, and salvage crews are currently working round the clock to free her.

Oil markets react

While many would counsel waiting out the storm, markets have reacted to the news of the Suez Canal’s blockade. This reaction isn’t much of a surprise considering how vital the pathway is to global trade.

One market that has seen significant effects has been oil. Oil prices bounced back in early trading on Friday, following a loss on Thursday.

Brent crude moved up by 43¢ (0.7 per cent) to $63.38 per barrel in the early hours of Friday. This followed a 3.8 per cent drop on Thursday. Brent might continue upward over the next few days if the canal crisis isn’t solved soon.

At the same time, West Texas Intermediate (WTI) gained significantly on Friday. This benchmark declined by 4.3 per cent on Thursday, but its losses have now corrected to just 0.8 per cent (or 49¢). WTI has held steady so far today above $59.