The Suez Canal, which handles around 10% of international maritime trade, has been blocked by container ships, causing traffic jams.
The Suez Canal in Egypt handles around 10% of international maritime trade and is one of the busiest waterways in the world, providing a crucial link for the transport of oil, natural gas and freight between the Atlantic Ocean and the Pacific Ocean.
When it was opened over 150 years ago, the canal was 164 km (102 miles) long and eight meters (26 feet) deep, but after several expansions over the years, it is now 193 km ( 120 miles) long and 24 meters (78 feet). Deep.
The canal remains one of Egypt’s main sources of foreign exchange.
How much traffic goes through Suez?
On average, 50 ships pass through the Suez Canal each day.
According to the Suez Canal Authority (SCA), nearly 19,000 ships, with a net tonnage of 1.17 billion tonnes, passed through the canal in 2020, “the second highest load in the history of channel”.
Fastest route for transporting oil
The majority of oil transported by sea passes through the Suez Canal, which is the fastest crossing between the Atlantic Ocean and the Indian Ocean, but which requires significant transit tolls.
The journey between Gulf ports and London, for example, is roughly halved going through Suez – compared to the alternative route around the southern tip of Africa.
Most of the goods traveling from the Gulf to Western Europe are petroleum. Manufactured goods and grains also pass through the canal often between Europe and North America and the Far East and Asia.
What happened in the Suez Canal?
On Tuesday, a large 200,000-tonne container ship heading for Rotterdam ran aground in the canal.
The hull of the 400-meter-long container ship Ever Given got stuck in the length of the canal track, causing at least 100 ships to congestion.
The container ship has been partially refloated and traffic is expected to resume soon, the GAC port agent said, citing the Suez Canal Authority.
What will the blockade of Suez mean for maritime trade?
The blocking of all traffic in the Suez by Ever Given could have a major ripple effect on global shipping moving between the Mediterranean Sea and the Red Sea.
Ten tankers carrying 13 million barrels of crude could be affected by the grounding, according to oil analysis company Vortexa. The reroutings will add 15 days to a journey from the Middle East to Europe, the company added.
What impact has this had on the oil market?
Oil prices climbed 2% as a result of the incident.
Brent for the May settlement jumped 2.1% to $ 62.09 a barrel, after falling 5.9% to a low of $ 60.50 the day before.
West Texas Intermediate (WTI) crude futures for May delivery rose 2% to $ 58.95 a barrel, after losing 6.2% in the previous session.