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Tankers and containerships, including a Cheniere LNG carrier and a Shell oil tanker, are changing course as the Suez Canal remains plugged by the Ever Given containership.
CNBV reported on Saturday, citing data from MarineTraffic and ClipperData, that at least ten tankers and containerships had been diverted from the blocked Canal, with a MarineTraffic spokesman telling the network there would be more. According to MarineTraffic, there are well over 200 vessels stuck waiting in the Suez Canal.
The incident that many are already calling a Suez Crisis pushed oil prices higher last week after it became clear that freeing the Ever Given—one of the largest containerships in operation globally—could take weeks. Some 3.6 million barrels of crude oil and petroleum products pass through the chokepoint daily.
Both Brent crude and West Texas Intermediate gained more than 4 percent on Thursday but started retreating on Friday on the back of a stronger U.S. dollar and pandemic-related factors, as well as the fact that Middle Eastern producers send less oil via the route that passed through the Suez Canal than other chokepoints.
The Canal only has “diluted importance as a transit hub for energy,” Bob Yawger from Mizuho Securities told Bloomberg on Friday, adding that the stronger greenback and “the incredible inability of the euro zone in particular to take care of the Covid situation” had a bigger part to play in oil price movements, as the well as the latest infection numbers in the U.S., which are on the rise.
Even if the effect of the Suez Crisis on oil prices is limited, it is costing global trade, and quite a bit: according to insurer Allianz, global trade could take a hit of $6-10 billion a week from the incident, with annual trade growth experiencing a cut of 0.2 to 0.4 percentage points. For every day the Canal remains blocked, it holds up trade worth 9.6 billion.
The latest reports say that the Ever Given was successfully refloated earlier today, but efforts are still underway to clear the vessel from the canal.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.