16 Oil Tankers Delayed by Suez Blockage

Wood Mackenzie estimates that 16 laden crude and product oil tankers have been delayed by the Suez Canal blockage, which is said to amount to 870,000 tons of crude and 670,000 tons of clean products.  

“These ships are currently in the canal itself or waiting at either the North entrance to the Suez Canal (Port Said Anchorage and Great Bitter Lake Anchorage) or at the Southern Suez Anchorage,” Wood Mackenzie principal analyst Mark Williams said in a company statement sent to Rigzone on Thursday.

“There are several vessels which are located to the south of the canal entrance which we believe are scheduled to discharge at various southern Suez ports. Our data suggests that there have been no cargoes diverted to alternative routes such as around the Cape of Good Hope,” he added.

Wood Mackenzie vice president Ann-Louise Hittle noted that oil prices rose by about $2 per barrel on the news of the blockage but added that stocks of both crude and products are high in the Atlantic basin.

“A few days of delays in crude or product travelling through the Suez Canal to the west (Europe/Americas) should not have a prolonged impact on the Atlantic basin market,” Hittle said.

“After the canal reopens, the crude market will shift focus towards the April 1 OPEC+ meeting to determine production levels for May,” Hittle added.

If the blockage is prolonged, oil product trade flows from Europe/Mediterranean to East of Suez will suffer a greater impact, reducing availability of naphtha, petrochemical feedstocks, and fuel oil to Asia, Williams warned.

“This would be supportive for Asia product prices and widen the West-East arb in the near term,” Williams said.

“The Sumed pipeline between the Red Sea and the Mediterranean is used to divert Middle East crude oil flows to Europe around the Suez Canal, so we expect minimal impact on such flows. Russian Black Sea crude exports beyond the Mediterranean will be limited by the blockage of the Suez Canal, so will need to be processed within by Mediterranean refiners,” he added.

A 1,300 foot long container ship’s hull became stuck lengthways across the canal on Tuesday, Bloomberg reported.

To contact the author, email andreas.exarheas@rigzone.com