Investor’s Business Daily:
1 Million Barrels A Day Blocked At Critical Chokepoint
Oil prices rose Wednesday as efforts to move a large container ship blocking the Suez Canal failed Wednesday, but U.S. crude stockpiles unexpectedly rose, fueling oversupply concerns.
The Ever Given, which is longer than the Eiffel Tower, lodged sideways in the canal Tuesday, following a dust storm. It blocked a hundred ships from entering the waterway. About 12% of global trade passes through the canal, including 1 million barrels of oil a day.
Video complements of The Jerusalem Post
Three oil tankers are reportedly stuck behind the Ever Given including one chartered by Saudi Aramco, according to a Wall Street Journal report. A port agent told Reuters around 8 a.m. ET that the ship had been partially refloated and moved alongside the canal bank.
But ships remain gridlocked, and the Suez Canal Authority has still not said when ships can transit through the waterway. Attempts to refloat the ship were suspended Wednesday as tugs and diggers failed to dislodge it, according to Bloomberg, adding that a Dutch salvage team is due to arrive Thursday with heavier equipment. And even if waterway traffic is resumed quickly, ships passing through the canal have been backing up for over a day, adding to supply chain disruptions.
While they move Ever Given, other factors are weighing on oil prices. Europe is experiencing its third-wave of coronavirus lockdowns with Germany, France and Italy tightening restrictions just as restrictions start to ease in the U.S.
“Eight tug boats were attempting on Wednesday to free a 400m (440-yard) long container ship that ran aground in the Suez Canal, blocking vessels passing through one of the world’s most important waterways, the authority that runs the canal said.The 224,000-tonne Ever Green was stranded on Tuesday morning after losing the ability to steer amid high winds and a dust storm, the Suez Canal Authority (SCA) said in a statement.
The authority said it was sparing no effort to ensure regular navigation through the canal, but it was unclear how soon the vessel would be free and sources said delays to shipping were expected.About 12% of world trade by volume passes through the canal connecting Europe and Asia. The canal remains a major source of hard currency for Egypt.