This article was originally published by Tyler Durden at ZeroHedge.
The Suez Canal Authority (SCA) reported Thursday it had suspended traffic along the 120-mile long canal while eight tugboats worked to free a massive containership, according to Reuters.
SCA’s statement said thirteen vessels had sailed south along the canal on Wednesday and were waiting in the canal’s lakes until the containership was refloated. On either side of the canal’s entrances, dozens of ships are piling up as the world’s most crucial shipping lane grinds to a halt.
The container ship called the Ever Given, owned by Evergreen Marine Corp., “could be stuck in the canal for weeks,” according to the firm working to dislodge the vessel.
Peter Berdowski, CEO of Dutch company Boskalis which has been tasked to dislodge Ever Given, was quoted by the Daily Mail as saying:
“We can’t exclude it might take weeks, depending on the situation. It’s an enormous weight on the sand. We might have to work with a combination of reducing the weight by removing containers, oil and water from the ship, tug boats, and dredging of sand.”
Berdowski compared the 1,312ft-long, 175ft-wide, 200,000-ton vessel to an “enormous beached whale” as he suggested offloading cargo might be one solution to refloat the ship.
A source familiar with the matter told Bloomberg that Ever Given is “lodged approximately 5 meters into the canal’s bank, hindering efforts to re-float it fully.”
As many as 50 vessels pass through the canal on a given day, which means upwards of 150 vessels could be waiting to transit the canal. By now, some vessels have opted for alternative routes.
NYMEX WTI crude oil futures are down 2% in the overnight session and don’t seem to care about the canal’s continued shuttering. Perhaps, oil traders are refocusing on virus troubles in Europe, hindering demand.
But as we must note, if the SCA were to release a statement indicating a prolonged shutdown of the canal, crude prices would likely continue to rise. This is because 12% of global trade and 8% of liquefied natgas traverse the canal and nearly one million oil barrels each day.
On top of global supply chains already stretched thin due to the virus pandemic, the world’s most important shipping lane is paralyzed.