The repercussions of the incident could be costly. Egypt is trying this Thursday, March 25 to free a giant container ship that has been blocking navigation for two days on the Suez Canal, a key trade route between Europe and Asia. This incident could slow global maritime traffic for several days and increase the price of oil.
The Egyptian Suez Canal Authority (SCA) announced on Thursday that maritime traffic was “Temporarily suspended” until the Ever Given refloat, the 400-meter ship (as long as four football fields) blocking the waterway.
“The maritime authorities indicated that 13 ships of the northern convoy (from the Mediterranean, editor’s note) via Port Said which were to pass (…) are stationary in waiting areas”, said George Safwat, spokesperson for SCA.
According to an evolving map from the bladelfinder site, dozens of ships wait at both ends of the canal and in the waiting area in the middle of the canal.
Oil prices jumped on Wednesday
The incident causes significant delays in the delivery of petroleum and other commercial products. And the news made oil prices jump. On Wednesday at 4:10 p.m. GMT (5:10 p.m. in Paris), WTI’s US barrel for the month of May gained 5.12% from Tuesday’s close to $ 60.42, AFP reports. At the same time, a barrel of Brent for delivery in the same month was worth 63.89 dollars in London, up 5.10%.
“The price of fuel at the pump could increase”, affirms Paul Tourret, director of the Higher Institute of Maritime Economy at “Parisien”.
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On the other hand, it is advisable to remain cautious. The prixdubaril.com website, which updates oil prices live, shows a drop in prices this Thursday. Oil is changing at the rate of information on the duration of the blockade of the Suez Canal, explains to AFP Edward Moya, market analyst. Investors “Are trying to estimate how long the huge container ship will block one of the busiest waterways in the world”, in order to measure the extent of the disruption of the supply of black gold as a result.
Several tugs have been trying to free the giant from the seas since Wednesday. The authorities sent a dredge to the scene of the incident. For its part, the Japanese company Shoei Kisen Kaisha, owner of the container ship announced that it was working with the canal authorities for the refloating, but that the operation was “Extremely difficult”.
An impact on prices if it lasts
The economic consequences should remain limited if the situation does not drag on, experts say. The impact on prices will depend on the duration of the blockage believes Bjornar Tonhaugen, of the Rystad cabinet, who told AFP that “The effect will probably be weak and transient”. On the other hand, “If the blockage lasts more than a few days, it could have a greater impact on prices and in a more lasting way”, he added.
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“We have never seen anything like this before, but it is likely that the congestion (…) will take several days or weeks to subside, because it should have a ripple effect on other convoys, schedules and markets global “, observes Ranjith Raja, analyst at financial data aggregator Refinitiv.
The current economic situation, against the backdrop of a health crisis and restrictions, means that prices are unlikely to rise much immediately.