The epic traffic jam of 400 ships caused by the Ever Given blockage of the Suez Canal is cleared, Egyptian authorities say

suez canal ever given
Photographers take pictures of ships sailing through the Suez Canal as traffic resumes after the “Ever Given” container ship operated by the Evergreen Marine Corporation, was freed after blocking the waterway route for almost a week.

  • A shipping backlog of more than 400 ships was caused by the Ever Given blocking the Suez Canal.
  • The 61 ships that remain stranded are expected to pass through the waterway on Saturday.
  • Problems caused by the blockage could take months to resolve, the world’s biggest shipping company warned.
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The shipping backlog that built up after the Ever Given container ship became lodged in the Suez Canal should come to an end on Saturday, authorities told Reuters.

The 61 remaining ships of the 422 that were left stranded after the major blockage are expected to pass through the waterway imminently, the Suez Canal Authority’s chairman, Osama Rabie, said.

Around 85 ships in total are set to pass through the canal on Saturday, he added.

Read more: The 4 biggest losers of the Suez Canal fiasco – and 4 surprising winners

Last Monday, the Egyptian president’s advisor for the canal authority told Bloomberg that it could take “around a week” to get all of the ships out of the canal’s corridor.

If the remaining ships successfully pass through the waterway on Saturday, the backlog’s end will have beaten expectations by a couple of days.

The reopening of the canal, however, will likely not mark the end of the disruption.

The world’s biggest shipping company, Maersk, warned on Monday that the shipping problems caused by the Ever Given could take months to resolve, Insider’s Sinéad Baker reported.

“Even when the canal gets reopened, the ripple effects on global capacity and equipment are significant and the blockage has already triggered a series of further disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel,” Maersk said.

The 1,300-foot Ever Given container ship was stuck for about 152 hours, with the blockage’s total costs reaching an estimated $60 billion.

Rabie told local television stations that an investigation into what caused the costly jam is ongoing and will reach its conclusion next week, Reuters reported.

“The investigation is going well‮ ‬and will take two more days. Then we will announce the results,” Rabie said.

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How to brace your portfolio for a worst-case scenario in the Suez Canal, according to JPMorgan’s chief global markets strategist

Suez canal ever given
The Ever Given, trapped in the Suez Canal, Egypt, as of Thursday March 25 2021.

  • The massive cargo ship blocking the Suez Canal will send the price of oil skyrocketing, JPMorgan said in a note published Thursday.
  • If not resolved soon, investors can expect shipping rates to soar and energy commodities to further increase.
  • All these risks, however, can be hedged by buying oil, the investment bank said.
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The massive cargo ship blocking the Suez Canal and obstructing one of the world’s busiest waterways will send the prices of oil skyrocketing, JPMorgan said in a note published Thursday.

JPMorgan’s chief global strategist Marko Kolanovic said if this situation is not resolved soon, investors and consumers can expect shipping rates to soar, energy commodities to further increase, and global inflation to continue to rise

All these risks, however, can be hedged by buying oil and associated equities such as energy and shipping, Kolanovic said. The strategist highlighted his long-term positive view on oil and energy stocks and his opinion that a supercycle in energy commodities may be under way.

The vessel, called Ever Given, a nearly 200-foot-wide and 1,300-foot-long cargo ship that is taller than the Eiffel Tower, has been horizontally wedged in the waterway for more than two days, despite ongoing efforts to dislodge it. It was on its way to the port of Rotterdam in the Netherlands from China.

Oil prices on Wednesday rose after news of the cargo ship sparked concerns of fuel shortage. West Texas Intermediate crude futures and Brent crude futures surged to their highest since November. The Suez Canal, the second-biggest shipping channel in the world, is a key shipping route for crude and refined products, connecting Europe to Asia.

The incident has captured the news cycle and points to the fragility of the infrastructure that supports global trade.

“Around 10% of global trade shipments pass through the Suez Canal on an annual basis, including crude and refined oil and liquefied natural gas,” Phillip Braun, professor of Finance at Northwestern University, wrote in a note. “This adds one more issue to the global shipping sector on top of the current pandemic.”

Oil analytics firm Vortexa in a tweet on Thursday said: “If flows remain disrupted for more than a few days, some European refiners could run short, particularly of sour crude feedstocks and tighten an otherwise weak physical European market.”

With the blockage, hundreds of cargo ships are now unable to pass through the canal. Many are forced to divert their routes or wait it out, exacerbating the shortages and shipping delays that have already compounded since the pandemic began last year. Companies since then have struggled to keep up with consumers’ demands as Americans locked down at home order goods from Asia.

Major brands such as Nike, Honda, and Samsung at the height of the pandemic have already warned their customers of dwindling supplies, with some halting production of certain products altogether.

In February, oil and natural gas prices have also climbed as the arctic blast that unexpectedly swept through Texas, leaving thousands without power, threw the energy markets in deep turmoil.

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Oil climbs 4% after a grounded container ship blocks key Suez Canal trade route

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The tanker is blocking the Suez Canal.

  • Crude oil prices climbed as much as 4% on Wednesday to roughly $60 per barrel, boosted by concern over a supply bottleneck.
  • A container ship is blocking the Suez Canal, which is one of the busiest trade routes in the world.
  • Oil prices have been highly volatile throughout the pandemic and lockdown cycles.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Oil rose as much as 4% on Wednesday after a huge container ship ran aground and blocked the Suez Canal, a key shipping route for crude and refined products. The blockage raised some concern about fuel supply.

Overall, the price of oil is set to fall for the third consecutive week this week. Another round of lockdowns in Europe could threaten the recovery in demand growth and have undermined some of the recent strength in the oil market.

One of the biggest container ships in the canal ran aground early on Tuesday and is stuck at a right-angle to the passage. Hundreds of cargo ships are now unable to pass through the canal, forcing them to divert their routes. It is unclear when the issue will be resolved. “This could have an impact on movement of oil and consumer goods.” Deutsche Bank strategist Jim Reid said in a daily report.

Throughout the pandemic and subsequent cycles of lockdowns and travel bans, oil prices have been highly volatile. Over the last 12 months, Brent crude oil prices have fluctuated from as little as $16 a barrel to as much as $71. As demand for oil, and therefore its price, is inherently linked to sectors that are impacted heavily by lockdown measures, such as travel, they have been sensitive to the developments of the pandemic. Over the last two weeks, prices have fallen by around 12% and are still on course for a third weekly fall, in spite of Wednesday’s rally.

The price response to the hold-up at the Suez Canal may not reflect expectations for a prolonged improvement in demand, analysts said. The futures market has eliminated a bullish structure known as “backwardation” – where prompt contracts trade at a premium to further-out futures contracts, which reflects bullishness among traders and investors about the demand outlook.

“The reprieve seems temporary, though, as the spot price fall overnight has completely removed the backwardation in the oil futures market for prompt deliveries. With speculative markets still long, it seems, oil is likely to be a sell on rallies until Covid-19 and economic recovery sentiment swings back into the black.” Jeffrey Halley, senior market analyst at OANDA, said.

Read more: MORGAN STANLEY: Buy these 10 stocks quickly that will roar higher as M&A heats up – including one with a potential upside of 114%

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