It’s been 2 days, and shipments are backing-up.
What does a Suez Canal ship have to do the motoring world? It doesn’t matter much on a normal day. Problems can occur if a ship blocks the entire south passageway of an important global shipping route. While delays can occur in all aspects of the vehicle, including parts and vehicles, long-term issues could cause problems for motorists. However, some drivers might see immediate consequences in the form higher fuel prices.
This is the Business insider assessment. It also explored this continuing problem more deeply. According to reports, the massive container ship Ever given lost power while crossing the southern end the canal. This caused its bow to go aground. It measures nearly 25 miles in length and, without the power to correct its course it drifted to the side, effectively closing down the canal. It happened Tuesday morning and, as of Wednesday night, there was no indication that it would be released anytime soon.
This is why it’s a much bigger problem than most people realize. The report estimates that more than 50 ships pass through this canal every day. This includes approximately 600,000 barrels Middle East crude oil bound for Europe and the U.S. Delays can definitely impact commodities markets. A quick look at current oil prices shows Brent crude up 5.6%. It is almost certain that this will be reflected in the prices we pay at our pumps, whether it be gasoline or diesel. With already stressed U.S. fuel markets due to the winter storm in Texas, it appears that drivers in the States may see worsening conditions before they get better.
Ironically, it was only a year ago when the U.S. Oil prices fell to below $0 per barrel in April 2020. WTI crude oil was trading at -$13.10 in April 2020 as a result COVID-19 lockdowns, which turned cities and highways to concrete and asphalt ribbons. Americans are much more mobile one year later. WTI crude was trading at $61.18 at the time of publication, an increase of nearly 6 percent.