Suez Canal’s Ever Given shakes the oil market

Suez Canal’s Ever Given shakes the oil market

/ News & Interviews / Sunday, 28 March 2021 05:05

The Suez Canal intensified efforts to free a giant container ship blocking the vital trade waterway that has sent shipping rates for oil product tankers through the roof and disrupted the global supply chains for everything from oil to cars to grains.

Efforts to dislodge the Ever Given ship may take up to a week, but, Japenese owner says they aim to free the vessel in a matter of days but cannot guarantee the effort will be complete by then.

The blockage sent oil prices climbing on international markets and rise by 4% in the fears that the blockage could tie up shipments of crude oil.

At least four Long-Range 2 tankers that might have been headed towards Suez from the Atlantic basin were now likely to be evaluating a passage around the Cape of Good Hope, the London-based shipbroker Braemar ACM said. Each LR-2 tanker can carry 75,000 tonnes of oil.

About 12% of global trade passes through the Suez Canal, which connects the Mediterranean to the Red Sea and provides the shortest sea link between Asia and Europe.

The Ever Given, registered in Panama and operated by the shipping company Evergreen, 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.

At 400m long and 59m wide, the ship has blocked the path of other vessels which are now trapped in lines in both directions.

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