The blockage of the Suez Canal by a giant container vessel is likely to send ripples of disruption through the global energy supply chain. European and U.S. refiners that rely on the vital waterway for cargoes of Middle Eastern oil may be forced to look for replacement supplies should the blockage persist, potentially boosting prices of alternative grades. At the same time, flows of crude from North Sea fields destined for Asia will be held up.

The critical trade route has been thrown into turmoil after the container ship ran aground on Tuesday, blocking traffic in both directions. While the vessel is only likely to remain stuck for a couple of days, that’ll be long enough to scramble some energy flows, creating an extra headache for refiners, traders and producers already coping with the pandemic’s fallout. Local pipeline networks, however, should help to alleviate some of the disruption.
relates to Suez Canal Blockage May Ripple Through Global Energy Market

The bow of container vessel MV Ever Given after running aground in the Suez Canal on March 24.

Source: Suez Canal Authority via AP Photo

“There are plenty of alternative trades for European importers to avoid the Suez Canal,” said Ralph Leszczynski, head of research at shipbroker Banchero Costa & Co.