We’re probably looking now at the longest ever accidental closure of the Suez Canal, the vital trade link from the Middle East and Asia to Europe and North America, but oil markets aren’t blinking.
The container ship Ever Given — 440 meters long, 59 meters wide and riding at a depth of 15.7 meters in the water — is stuck fast, with its bow wedged into the eastern bank of the canal and its stern in the western bank. Photos showing the vessel’s bow right up to the edge of the canal suggest that almost 50 meters of the ship are aground. Getting it free isn’t simple and could take several more days.
The reaction of the oil market has been muted, however, and justifiably so. On Wednesday, when the problem first became fully apparent, crude did recover some of the previous day’s loss, but prices have begun to weaken again. The market was already coming to terms with yet another slowdown in recovery as the pandemic surges again in parts of the world. Renewed lockdowns in France and Italy have dampened the immediate outlook for European oil consumption, while U.K. politicians have warned citizens that it’s too early to consider flying off to sunny southern Europe for their holidays, undermining hopes for a rebound in air travel.
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