IARN — Egypt’s Suez Canal remains blocked by a skyscraper-sized cargo ship, backing up hundreds of other vessels along the crucial waterway.
The Ever Given, a Panama-flagged ship that has been described as being nearly as long as the Empire State Building, wedged across the Suez Canal on Tuesday and remained stuck as of Thursday. Reports say the giant ship may take weeks to free. Allendale commodity broker Greg McBride says the container ship is blocking transit in both directions along the man-made canal linking Asia and Europe.
“As you watch this situation in the Suez Canal, that is a big issue for the amount of crude oil that is moved through that waterway every single day,” McBride said. “We’re talking 500-600 thousand barrels a day that moves through there. If you already had the concern about demand from over in Europe, this is another big concern as far as the movement of that crude oil from the Middle East to the West over here. As we’ve seen over the last few days, we’ve been getting hit when it comes to concerns over demand for fuel and for crude oil.”
McBride notes that as the Suez Canal remains blocked, efforts continue to refloat and dislodge the ship. The Suez Canal Authority said eight tugs were working to move the diagonally stuck vessel.
“From what we’re hearing, we’re talking about multiple days here,” McBride said. “We’re already on day two or three at this point. They are talking about it not being able to be freed maybe even into this weekend, which obviously as you continue to back that up – there’s about 50-100 ships that go through that waterway every single day – at this point there is somewhere in the neighborhood of 100-150 ships that are backed up.”
McBride says it’s important to remember that as the price of crude oil goes, so does the price of other crude-sensitive commodities such as corn, soybean oil and cotton.