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CAIRO (BLOOMBERG) – Ships in the Suez Canal were diverted to an older canal on Wednesday (March 24) after a large container ship ran aground, blocking ships passing through one of the most important waterways in the world, said maritime sources and companies involved.
The hull of the 400-meter-long container ship Ever Given was wedged along the canal on Tuesday, causing at least 100 vessels seeking to transit between the Red Sea and the Mediterranean, according to ship brokers and map data compiled by Bloomberg.
So far, no progress has been made on the ship’s flotation and canal cleaning, the Gulf Agency Company (GAC), which provides services including Suez transits, said by email.
The Ever Given’s weight – about 224,000 tonnes – and the small size of the tugs operated by canal authorities have hampered the work so far, according to two people familiar with the situation, who asked not to be identified discussing private details. Ship owners are in talks with SMIT Salvage BV, which has larger tugs, to help, indicating that it may take days to clean the canal, one of the people said.
About 42 vessels, either in the northbound convoy or arriving to transit the canal northbound, are now waiting for the ship ashore to be refloated, according to Leth’s agencies. Another 64 vessels traveling south were also affected.
There was “a grounding incident” in the Suez Canal, said Alok Roy, BSM Hong Kong’s fleet manager, the manager of the Ever Given vessel. No injuries or contamination have been reported, he said.
Taiwan’s Evergreen Marine Corp, which rents the boat under a time contract, said the owner of the boat had informed the company that it was suspected that the boat “had been hit by a sudden strong wind, causing the hull to buckle. deviate from the waterway and accidentally hit the bottom and run aground. ” A “blackout” was the cause of the accident, GAC said, without providing further details.
Ship tracking data showed the Ever Given was still in the same position as around 2am Wednesday in Cairo. A spokesperson for the Suez Canal Authority could not be reached for comment after midnight local time.
The Suez Canal is among the busiest waterways in the world, used by tankers transporting crude from the Middle East to Europe and North America.
While the vessel is likely to remain stuck for only a couple of days, the lockdown is likely to send a wave of disruption through the global oil supply chain.
European and US refiners may be forced to seek replacement supplies if the lockdown persists, which could boost prices for alternative grades. At the same time, oil flows from the North Sea fields to Asia will be stopped.
Oil prices fluctuated on Wednesday as investors assessed the impact on global crude flows.
While crude initially rose on news of the drop, broader signs of market weakness are keeping prices in check. Futures in New York fell below $ 60 a barrel on Tuesday and are down more than 12 percent in less than two weeks due to a number of factors including weakening physical demand and reversing long positions. .
The quick timeframe for global Brent crude has also turned into a bearish structure for the first time since January.
The canal is a crucial route, used primarily to transport crude from the Middle East to Europe and the United States, as well as to send fuel oil from west to east. The canal can carry fully loaded Suezmax vessels carrying around one million barrels and larger Very Large crude carriers, provided they transfer some cargo off the vessel before transiting.
On a daily basis, up to 600,000 barrels of crude flow from the Middle East to Europe and the United States through the canal, while volumes from the Atlantic Basin to Asia total about 850,000 barrels a day, according to Anoop Singh, director of the East. of the Suez tanker investigation at Braemar ACM Shipbroking.
In addition, 400,000 barrels of naphtha go west to east through the canal each day, while 300,000 barrels of middle distillates go the other way. Naphtha, derived from crude oil, is used to make plastics and mix with gasoline, while middle distillates, also made from crude oil, include jet fuel and diesel.
Boat charterers or owners who are unwilling to wait for the blockade to clear may choose to sail around South Africa, although that is a much longer route that would take more time and increase costs.
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