Suez blockage risks disrupting global LNG shipments
A vessel blocking the Suez Canal could disrupt deliveries of oil and natural gas to the international market for days, experts monitoring the situation said March 24.
Vessel-tracking service Fleet Monitor reported the ultra-large container vessel Ever Given ran aground in the Suez on March 23 after entering the waterway northbound from China. Fleet Monitor added that a Russian naval vessel also collided with a bulk carrier in the Suez, with both ships suffering minor damage.
Data intelligence firm Kpler indicated that at least five tankers laden with LNG were unable to pass through the Suez because of the incident.
“Disruptions in gas supply may be more serious if the blockage lasts for a few days,” Vandana Hari, founder and CEO of Vanda Insights in Singapore, told NGW. “Unlike oil, of which there is plenty in storage around the world that can be quickly tapped, finding quick alternative gas supplies might be more of a problem.”
Commodities were trading higher on March 24 on the news. The price for Brent was up some 2% early in the session, while gas prices on the New York Mercantile Exchange were up about a quarter of a percent.
Clay Siegle, the managing director of cargo tracking company Vortexa, said from Houston that any lengthy delays in reopening the Suez could have sweeping implications for global commodity trade.
“If today’s loaded tankers are significantly late in making deliveries, then they’re also going to be late for their next mission,” he said in an emailed statement.
Nearly 10% of the world’s LNG and oil heads through the Suez each year. During an Asian cold spell in December and January, US shippers used the Suez to deliver LNG because of congestion in the Panama Canal.