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Suez Canal Blockage

On 25th March 2021, Admiral Osama Rabie, the Chairman and Managing Director of the Suez Canal Authority announced the suspension of navigation through the route temporarily. The reason was an accidental blockage by a Panamanian container ship with the name “Ever Given”. The decision was taken till the floatation measures were completed which included “pushing the grounded vessel using 8 large tugboats, largest of which is “BARAKA 1” with a towing power of 160 tons”. 

Suez Canal has been extremely important for international trade from historical times. It is one of the busiest trade routes in the world and constitutes of 12% of the total Global figures.  The blockage of the sea route has resulted in increase in the traffic and led to trapping of other vessels as well. Although the process of working towards cleaning up the path began the next day itself, the experts warned that it could take days to clear up. 

Even Given is one of the biggest ships on the route and countries are concerned as the blockage has a huge impact on the trade as well as economy. The United States (US) came forward to assist the Suez Canal Authority however the drill will require a combination of digging, tugging and removal of weight from the vessel. Turkey and Netherlands too have volunteered to help. In the meantime, there is a constant fear of the ship breaking into half due to the uneven weight.

While any mechanical or technical reasons have been denied, the cause for the ship getting stuck could be natural including storm or winds.

The result was seen a drastic rise in the oil product tankers prices which nearly doubled. Reuters reported that the German insurer Allianz estimated a loss of something between USD 6 billion to USD 10 billion in a week. The oil prices rose by 3% and Asia with almost 60% export through the canal, along with Europe will suffer major losses due to their dependency on the Suez Canal for trade. The transfer of goods from the alternate routes like the Russian port of Tuapse to Southern France will be much more expensive than through the canal. However, there isn’t much option left.

Suez Canal has remained important for trade since ancient times when modes of communication were explored and has been a major connector between Africa, Asia and Europe. The declogging of the canal is awaited by all the stakeholders with their breath held. Countries are definitely coming together for mutual interests as well as for helping Egypt clear out the blockage.