The blockage of the Suez Canal by a grounded container ship will likely add delays and extra costs to an already pressured logistics industry, say executives, punctuating the tightness of the world’s supply lines.
Oil prices rose and shipping stocks fell Wednesday as authorities in Egypt sought to dislodge a giant vessel blocking traffic on one of the world’s busiest shipping arteries, with industry executives warning that even a brief delay could have an outsize impact.
Disruption on the 120-mile Suez Canal, which connects the Red Sea with the Mediterranean, comes as global supply lines are already grappling with the continuing effect of the coronavirus pandemic, a global shortage of computer chips and adverse weather.
The Suez Canal is a vital trade route for tankers carrying oil and natural gas, along with container ships moving manufactured goods such as clothing, electronics and heavy machinery from Asia to Europe and the other way around. Some 19,000 vessels crossed the Suez in 2020, according to the Suez Canal Authority.
The passage is a particular choke point for the energy industry, with about one-tenth of the world’s seaborne oil trade flowing through it and the associated Sumed—or Suez-Mediterranean—pipeline in 2018, according to the U.S. Energy Information Administration.
