Stranded ship partially refloated in Suez Canal: All you need to know

Nearly a week ago, skyscraper-sized cargo ship 'Ever Given' got stuck sideways in the Suez Canal bringing about 30 per cent of global container trade to a halt.

Business Desk, ETV Bharat: In a sigh of relief for traders across the world, Suez Canal authorities succeeded in straightening the colossal container ship that blocked the one-lane waterway last week sending shockwaves through the global trade.

Lt Gen Osama Rabei, the head of the Suez Canal Authority, confirmed that workers had straightened the vessel's position by 80% and that the stern had moved 102 metres from the canal bank.

He further said that the vessel had been partially refloated after responding successfully to pull-and-push manoeuvres.

Satellite data from MarineTraffic.com showed that the ship's bulbous bow, once firmly lodged in the canal's eastern bank, had been wrested partially from the shore although it remained stuck at the canal's edge.

Although the movement represented the most significant progress yet, the salvage crew urged caution as obstacles loomed.

Nearly a week ago, the skyscraper-sized Ever Given got stuck sideways in the Suez Canal, creating a massive traffic jam.

The obstruction has held up billions of dollars of global trade and strained supply chains already burdened by the Covid-19 pandemic.

At least 367 vessels, carrying everything from crude oil to cattle, were still waiting to pass through the canal, while dozens were taking the alternate route around the Cape of Good Hope at Africa's southern tip, adding some two weeks to journeys and threatening delivery delays.

The partial freeing of the vessel came after intensive efforts to push and pull the vessel with 10 tugboats when the full moon brought spring tide, Leth Agencies said, raising the canal's water level and hopes for a breakthrough.

Videos shared widely on social media appeared to show tugboats in the canal sounding their horns in celebration of the Ever Given being partly wrenched from the shore.

Insurance firms stare at huge losses

As unblocking of Suez Canal is still a work in progress, the global insurance industry is awaiting the enormity of claims.

For India, pressure could mount for certain industries that depend on Europe and the US and it is expected that there could be pressure for a while on the Indian ports on the west coast as many of these vessels may seek berthing together in rapid succession.

R. Balasundaram, Executive Vice-president, Global Insurance Brokers said Suez Canal blockade, a once-in-a-lifetime type of event is estimated to cause losses in billions of dollars for insurers and the loss of trade per day due to the blockage at close to USD 9 billion.

There are various areas of claims to possibly come up such as demand for GA (General Average) and Salvage guarantee from cargo interests, or damages against the vessel, business interruption losses, etc.

There could be losses due to perishable cargo or the cancellation of orders, hence the claim demand.

Crude oil tumbles as Suez ship freed

Crude oil prices fell on Monday as the vessel blocking the Suez Canal was freed.

Brent crude fell 90 cents to USD 63.67 a barrel, while the US crude lost USD 1.03 to USD 59.94 per barrel.

Crude prices fell after rising 4 per cent over the last few days as the blockage triggered anxiety among major oil consumer nations.

The Suez Canal accounts for about 30 per cent of global container ship traffic each day.

The blockade has hurt supplies of oil and affected shipping and container rates, leading to a rise in the cost of goods.

In fact, Syrian government has started rationing the distribution of fuel in the country amid concerns that shipments could be delayed, reports Aljazeera.

The 193 km (120-mile) Suez Canal connects the Mediterranean Sea to the Red Sea and provides the shortest sea link between Asia and Europe and accounts for around 30 per cent of the global shipping container volume.

(With Agency Inputs)