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The skyscraper-sized ship blocked the most important transportation artery for the passage of tankers with Arab oil to Europe and the United States.
The gigantic container ship Ever Given ran aground in the narrowest part of the Suez Canal and completely blocked one of the busiest waterways in the world. Approximately 150 ships can no longer move.
This caused delays in the supply of energy and an increase in oil prices. It may take several days for the movement to fully recover. Correspondent.net says the details.
Collapse of transport on a planetary scale
On March 23, the container ship Ever Given, owned by Evergreen Marine, ran aground while passing through the Suez Canal, one of the world’s most important trade routes connecting the Red and Mediterranean Seas.
The ship, which sails from China to the Netherlands under the Panama flag, is 400 meters long (about the length of four football fields), 59 meters wide and can carry more than 20,000 cargo containers. This makes it one of the largest container ships in the world.
What caused the incident is still unknown. According to one version, the blame is on the strong wind, causing the container ship’s hull to drift off course and run aground. On the other hand, visibility is poor due to the dust storm that hit Egypt the day before.
There is a third version: there was a power outage on the ship, it lost control, and as a result, it passed across the channel.
Now eight tugs and several units of land equipment are working on the emergency site, which is trying to excavate it, but the channel has not yet been unblocked: for the moment, the giant ship has only been partially removed from Los Bajíos.
The task is further complicated by the fact that there are more than 20,000 heavy containers on board Ever Given.
There is no specialized equipment to unload one of the largest cargo ships of its kind in the desert, writes Vgudok, a network publication on logistics and transportation. It would take 140 trains to remove all the containers.
Until now, the canal administration has been forced to open its old sections to alleviate the congestion formed on both sides of the corridor.
Ships have run aground in the Suez Canal before, but Ever Given’s case is unique. This is the first time a ship of this size has run aground, creating an unprecedented disruption in the rate of shipping.
The last time such an incident occurred in the Suez Canal in 2017, when a Japanese container ship ran aground due to technical failures. Then the Egyptians managed to resume navigation in the strait in just a few hours.
According to the US Department of Energy, the 190-kilometer-long and 205-meter-wide Suez Canal has assumed an important role in recent years as a transit route for oil from the Middle East to Europe and America, where about 600,000 barrels of oil pass. every day.
Fuel oil and gasoline return through the canal. It usually takes a Middle Eastern tanker about 14 days to travel to Italian refineries.
The Suez Canal route accounts for ten percent of the world’s oil transport and eight percent of liquefied natural gas. But the Suez Canal is not just about energy supplies.
About a third of the ships that pass through the canal are container ships, according to the Suez Canal Authority. Canal toll revenue generates approximately $ 6 billion a year in Egypt.
Payments for the ships themselves are highly dependent on type, route, cargo, etc., but, for example, according to The Loadstar, the transit of an Ever Given-size container ship through the Suez Canal will cost $ 700,000.
The ship blocked the Suez Canal / AP
In 2020, almost 19,000 ships passed through the Suez Canal, or on average more than 50 ships per day. The long blockade of the canal has led to a delay in the delivery of goods, additional transport costs and a shortage of free containers and container ships, experts say.
Oil was the first to react to the collapse of transport on an almost planetary scale. May Brent futures on the news of the Suez Canal lockdown rose two dollars.
The price of May Brent futures rose 5.13 percent per day to reach $ 63.91 a barrel. The cost of May futures on WTI Texas in 24 hours rose 5.14 percent to $ 60.73 a barrel.
At the same time, on the eve of the Brent price falling about six percent due to fears that demand for fuel in the near future will be weaker than expected, as well as in the context of the resumption of restrictions quarantine in a number of countries, including Germany and France.
Buyers in Europe and the United States can now trade oil from the Middle East for oil from other regions, including the Gulf of Mexico, the North Sea, Russia and West Africa, Bloomberg writes, citing ship brokers.
As a result, demand for Mars Blend, the Urals, and even oil from Asia and the Russian Far East may increase.
However, experts say the situation with a stuck container ship is a “good short-term factor” for price increases, but this effect will not last long.
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