Wednesday, 05 May, 2021


Oil trades higher as Suez Canal jam continues

Suez Canal ship stuck Firms start rerouting vessels as ship blocking Suez Canal could take weeks to free
Conrad Doyle | 27 March, 2021, 01:29

The Suez Canal Authority, which operates the waterway, has deployed several tugboats in efforts to refloat the massive vessel, including a specialised suction dredger that is able to shift 2,000 cubic metres of material every hour. German firm Bernhard Schulte Shipmanagement (BSM) is responsible for its day-to-day operational running.

"We have conveyed our offer to help to our Egyptian brothers and if a positive response comes from them, our Nene Hatun ship is among the few in the world that can carry out work of this nature", Karaismailoglu told broadcaster NTV, adding Ankara had not received a response yet but was ready to act.

Initial investigations suggest the vessel was grounded because of strong wind and rule out any mechanical or engine failure as the ship was transiting the canal on Tuesday with two canal pilots on board, BSM said.

The blockage has caused a traffic jam for more than 200 ships at either end of the 193-kilometre canal. Such an arrangement is customary, but the ship's captain retains ultimate authority over the vessel, according to shipping experts.

"Around 20% of Asia's naphtha is supplied by the Mediterranean and Black Sea via the Suez Canal", said Sri Paravaikkarasu, director for Asia oil at FGE, adding that re-routing ships around the Cape of Good Hope could pile about two more weeks to the voyage and more than 800 tonnes of fuel consumption for Suezmax tankers.

Apparently anticipating long delays, the owners of the stuck vessel diverted a sister ship, the Ever Greet, to head around Africa instead, according to satellite data.

Others further away which would ordinarily use the canal are also weighing alternatives. The liquid natural gas carrier Pan Americas changed course in the mid-Atlantic, now aiming south to go around the southern tip of Africa, according to satellite data Friday from MarineTraffic.com. Roughly 12 percent of the world's trade runs through the canal, and world powers have tried to control the canal throughout history in an effort to influence trade. The closure also could affect oil and gas shipments to Europe from the Mideast.

The Ever Given's location, size and large amount of cargo make the operation more complex, Sloane said. He admitted, however, it could take weeks to complete the task.

That's because the clock is also ticking structurally for the vessel, he added.

How long will all this take?

Many of those vessels will arrive in European ports at the exact same time, and find they have nowhere to dock and unload their cargo. "So it's not an easy situation". Singapore's Minister of Transport Ong Ye Kung said the country's port should expect disruptions.

Analysts have warned that the ongoing blockage in the Suez Canal is likely to have significant repercussions for global supply chains, which have already been under strain since the outbreak COVID-19 pandemic.

The Ever Given - a megaship that's longer than the Eiffel Tower is tall (324 meters) - remains jammed across the Suez Canal, despite more than three days of attempts to free it. While a company might know it has a product sitting on a ship that's stopped, the impact of delays down the line are unknown. The official spoke on condition of anonymity as he was not authorized to talk to journalists.

A blockage of this kind and of this scale has never happened in the Canal's 150-year history.

The canal extends from the northern terminus of Port Said to the southern terminus of Port Tewfik at the city of Suez.

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