The huge container ship weighing 225,000 tons that is stuck in the Suez Canal and blocks it is expected to remain there for many days to come, and it is estimated that the rescue efforts will not be completed at least next week.
Blocking the canal for such a long time increases the chance of disruptions in global oil supply. Currently, oil futures are up more than 2%, in line with the volatility of recent days.
The Suez Canal, which separates Africa and Asia, is one of the busiest trade routes in the world, with about 12% of all world trade passing through it.
The shipping industry also suffers from a shortage of containers and supply difficulties, and blocking the canal for such a long period will further exacerbate the situation and may raise transport prices, with many ships having to make a detour through Cape of Good Hope in South Africa and extend their journey at sea for another two weeks.
Meanwhile, ship operators have begun routing tankers and containers away from the Suez Canal – and in some cases indeed sending them on a two-week long journey around the tip of South Africa. During this they are actually betting that the closure of the canal will last an even longer period.
Energy products such as liquefied natural gas, crude oil and refined oil that pass through the canal make up 5% -10% of global shipments. The rest of the traffic in the canal is mainly consumer goods like clothes, furniture, car spare parts and more. Maritime transport in the Suez Canal is a significant source of foreign exchange for the currently struggling Egyptian economy, so its long-term blockade could lead to economic damage to the country.