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Crude oil price rises after Suez Canal blockage - Daily News Egypt

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Crude oil price rises after Suez Canal blockage

Approximate rate of backlog is 50 vessels/day, any delays leading to re-routings will add 15 days to Middle East to Europe voyage

The price of crude oil rose by $1.75, or 2.9%, to $62.54 a barrel, on Wednesday, as a giant container vessel was trapped on the Suez Canal’s parallel channel.

The Ever Given vessel, owned by Taiwanese marine company Evergreen Marine Corporation, ran aground in the Suez Canal, on Tuesday, halting marine traffic in one of the world’s busiest shipping routes. The cause of the incident remains unclear for now, although recent bad weather in Egypt has been highlighted as the suspected cause.

Admiral Osama Rabie, Chairperson of the Suez Canal Authority (SCA), said that the older section of the canal was opened to ease the flow of traffic, which occurred due to the incident. The SCA said that it has also deployed tug boats to help shift the trapped large container ship.

“The ability to guide the vessel as it travelled through the new channel was lost as a result of the turbulent weather the country experienced yesterday, which led to the incident,” the SCA added.

The Ever Given, a Taiwan-owned container registered in Panama, was bound for the port city of Rotterdam in the Netherlands from China, and was passing northwards through the canal on its way to the Mediterranean Sea.

About 30% of global container ship traffic passes through the canal each day, carrying everything from fuel to consumer goods.

However, Reuters cited a shipping source and witness as saying, “The first ship from a convoy that had been blocked by a stranded vessel in the Suez Canal is on the move, indicating a resumption of traffic in the waterway.”

Reuters added that the Ever Given “had been partially refloated and moved alongside the canal bank,” although Egypt’s shipping authorities have not confirmed the news.

Bernhard Schulte Shipmanagement, the company which manages the Ever Given, said all 20 crew members were safe, and that there had been “no reports of injuries or pollution”, according to the AP news agency.

The company, however, denied the ship had lost power. Evergreen Marine Corporation said in, a statement, that the Ever Given had been overcome by strong winds as it entered the canal from the Red Sea, but none of its containers had sunk, the AP reported.

Meanwhile, in Egypt’s House of Representatives, the trapped ship was part of Wednesday’s parliamentary discussions. 

Alaa Abed, head of the parliamentary Transportation Committee, confirmed that the the reason for the block was because of wind and the bad weather. Abed said that there are currently nine tug boats that are participating in the vessel’s removal.
Abed added, “The transportation committee supports all the workers in the SCA, as the canal is one of the most important sources of income in Egypt, and the new Suez Canal is one of the new mega national projects executed by the Egyptian state.”

Several international news outlets reported said that world trade and maritime movement might be affected. 

Ahmed Mekawy, an assistant manager at GAC’s Egypt office, said the Dubai-based agent had earlier received inaccurate information that the Ever Given had been partially refloated.

In addition, 10 tankers carrying 13 million barrels of crude oil could be affected. after a container ship that ran aground in the Suez Canal, blocking vessels passing through, oil analytics firm Vortexa said on Wednesday. The approximate rate of backlog is about 50 vessels a day and any delays leading to re-routings will add 15 days to a Middle East to Europe voyage, Vortexa added.

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