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Oil prices fall as Suez Canal reopens
Oil prices began to fall on 30 March 2021 as Egypt’s Suez Canal finally opened, relieving vessel congestion and allowing oil supply to begin flowing again to Europe without long delivery delays.
The 200,000 tonne Ever Given container ship that was blocking the canal had been blown off course by high winds in the early hours of 23 March. Measuring some 400 metres in length, and thus wider than the canal, it became wedged diagonally between both banks. It was finally freed from the eastern canal bank shortly after 2pm GMT on 29 March. According to operator Evergreen Marine, the vessel is now anchored in the Great Bitter Lake, where it is undergoing ‘an inspection of its seaworthiness’ before hopefully resuming its scheduled service.
Some 12% of the world’s maritime trade passes through the Suez Canal, which connects the Mediterranean Sea to the Red Sea and allows ships to shorten the trip between Europe or the US east coast and Asia by thousands of kilometres, saving a week or more of travel time.
However, due to the large number of vessels that have been blocked from transiting the canal over the past week, it could still be days or even weeks to clear the backlog.