WEDNESDAY, MAR 24, 2021 

The Suez Canal Authority has yet to comment on whether the ship has been moved.

Update (0704 ET): The blockage of the Suez Canal by a massive container ship called the Ever Given, owned by Evergreen Marine Corp., could last for at least another day and send ripples of disruption through global supply chain networks, according to Bloomberg. 

Eight tug boats have been working through Wednesday to free the 400m long container ship that ran aground in the Suez Canal on Tuesday. The angle at which the Ever Given ran aground has completely blocked the canal. The canal is a chokepoint for the global oil trade as dozens of vessels are moored outside both entrances waiting for the container ship to get unstuck.

"The salvage operation with tugs is underway, and hopefully, the vessel will be freed soon, but it could last days," said Ralph Leszczynski, head of research at shipbroker Banchero Costa & Co.

An official with the Gulf Agency Company in Egypt told Bloomberg no progress had been made in clearing the canal. The mishap's cause is due to the vessel's loss of steering amid high winds and a dust storm, the Suez Canal Authority said in a statement.

Taiwan-based Evergreen Line told Bloomberg in an emailed statement that the vessel deviated "from its course due to suspected sudden strong wind." 

The 120 miles long Suez Canal is the most trafficked waterway globally, mainly by chemical tanker ships hauling crude and other crude products from the Middle East to Europe and North America. About 12% of global trade and 8% of liquefied natgas traverse the canal and nearly one million oil barrels each day. 

Grounded Ever Given Chokes World's Most Vital Shipping Lane

The canal's blockage has led to a gridlock of vessels on either side of the canal's entrances.  

After Tuesday's steep selloff, crude futures rebounded on Wednesday on the Suez Canal developments. Brent futures are up 2.48% to $62.30, and WTI trades around 59 handle, up more than 2%. 

"It's all about the Suez, as well as people trying to get into oil again after the selloff," said Bjarne Schieldrop, chief commodities analyst at SEB AB. It appears lockdowns, mutations, and vaccination rollout delays are on the backburner for now. 

While the vessel is expected to be unstuck in the near term, energy flows and other types of cargo traversing the canal may experience prolonged shipping times. This could be an additional headache for refiners, traders, and producers already dealing with supply chain disruptions due to the virus pandemic. 

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In what appears to be a freak accident, a Panama-flagged container ship called the Ever Given, owned by Evergreen Marine Corp., has run aground inside the Suez Canal, the critical artificially made shipping lane connecting the Red Sea with the Mediterranean.

Known as a critical chokepoint for the global oil trade, the Suez has become blocked in both directions thanks to the peculiar angle of what's been described as a "megaship".

The ship was traveling from a port in Egypt to Rotterdam, in the Netherlands, one of the world's most active ports. It was due to arrive March 31.

Ships are already stuck in the water. In addition to weighing almost 200K tonnes, here's more info on the ship courtesy of Reuters.

The traffic jam has reportedly spread from the canal, back into the Red Sea and the Mediterannean.

At a time when shipping companies are already struggling to recover from the strains of the COVID pandemic, which required them to rejigger global shipping routes in fundamental ways. It's also presents risks to the inflation outlook, as the lingering containership shortage mentioned above is slowing down the pace of global trade at a time when Americans' demand for products foreign-made consumer products is surging.

It could take days for a major Dutch salvage company to ride to the rescue.

In the meantime, looks like we're in the midst of another Suez crisis...albeit one that lacks a political dimension.