Frantic efforts on to dislodge ship blocking Suez Canal
CAIRO, March 28, 2021
Efforts to dislodge a giant container ship blocking the Suez Canal have allowed its stern and rudder to move, but it remains unclear when the vessel will be refloated, the head of the canal authority was quoted as saying by a Reuters report.
The 400-metre (430 yard) long Ever Given became wedged diagonally across a southern section of the canal amid high winds early on Tuesday, blocking one of the world's busiest waterways.
A combination of dredging material from around the ship and pulling and pushing the vessel with tugboats made minor progress in dislodging the ship on Saturday, two SCA sources said. One source said there had been some movement at the bow of the ship.
Suez Canal Authority (SCA) Chairman Osama Rabie told local TV that water had started running underneath the ship. "We expect that at any time the ship could slide and move from the spot it is in," he told a press conference earlier.
He said that dealing with this ship was difficult as it has a 400 m long and 59 m wide, in addition to an overall loading of more of 223,000 tons, pointing out that the sandstorm was not the main reason for its grounding, indicating that in such big incidents there would be more than a single reason.
Rabie denied that Ever Given grounding was deliberate, explaining that there are technical reasons behind the giant container grounding within other reasons and this will not be determined until the investigations are completed.
If the blockage drags on, shippers may decide to reroute their cargoes around the Cape of Good Hope, adding about two weeks to journeys and extra fuel costs. Rabie said the ships that are waiting were free to reroute, but none had yet done so.
He said 321 vessels were waiting to enter or continue their transit through the canal. Those included dozens of container ships, bulk carriers and liquefied natural gas (LNG) or liquefied petroleum gas (LPG) vessels, according to a shipping source.
Fourteen tugs have so far been involved in efforts to refloat the Ever Given, although Boskalis and Smit Salvage have warned that using too much force to tug the ship could damage it.
There are currently around 30 tankers above 25,000 dwt waiting to cross the Suez Canal.
The US Navy in the Middle East planned to send an assessment team of dredging experts to the Suez Canal as soon as Saturday to advise local authorities, according to two US defense officials.
"We expect most vessels in ballast will decide to wait until the situation clarifies and, if fixed on a charter party, will likely get cancelled by charterers through protection clauses related to missing agreed upon laycan dates. This will no doubt affect vessel supply on both sides of the canal, as well as market rates," said a report from the Signal Group.
Black Sea-Med Aframax seems to be leading the charge with WS170 on subs late on March 26.
Over the coming days and weeks, more vessels are expected to have to decide if they will cross through the Suez Canal or via the Cape of Good Hope. For reference, a vessel currently crossing the Indian Ocean would take 14 days to reach Malta via the Suez versus 33 days via the Cape of Good Hope. The cost for a laden Aframax to pass through the Suez Canal is roughly $300,000.
Analysis of tanker types normally transiting the Suez shows that the most impacted are the Suezmaxes, Aframaxes and LR2 vessels. These vessel types trade through the Suez in both directions.
The LR2 market, being particularly thin, with a very small number of vessels both East and West, will potentially see significant changes on freight rates.
A major shipping lane is clearly closed, but this will most probably have a short-term effect for a few charterers and owners that are trying to carry cargo through the canal at present. Most large crude tankers (VLCCs) have historically taken the route around the Cape when undertaking long East to West or West to East voyages. Mid-sized tankers (Suezmax, Aframax) are more likely to be affected, maybe more so on the carriage of refined products. Low levels of crude oil demand due to the third wave of coronavirus across Europe and the USA are keeping oil prices in check, yet we still saw a 4% rise in prices on Friday, said the Signal Group report.
