Your gas was already getting more expensive – and the Suez Canal blockage risks driving prices even higher

  • Date: 24-Mar-2021
  • Source: Business Insider
  • Sector:Oil & Gas
  • Country:Gulf
  • Who else needs to know?

Your gas was already getting more expensive – and the Suez Canal blockage risks driving prices even higher

Add a crippling logistics nightmare to the list of factors sending gas prices higher. You could say it was ever a given.

On Tuesday morning, the container ship Ever Given ran aground at the Suez Canal and formed a traffic jam in one of the world's most critical trade routes. About 600,000 barrels of crude oil pass through it daily from the Middle East to the US and Europe, according to Braemar ACM Shipbroking data cited by Bloomberg. Another 850,000 barrels are shipped through the canal to Asia on a daily basis.

The recovery from the coronavirus pandemic was almost certain to lift oil prices anyway, but this sudden shock stands to make them climb higher. The world's most-traded commodity plummeted at the start of the health crisis and traded at historically low levels for months as demand failed to rebound, then started to bounce back in November and stabilized at pre-pandemic highs with economies on the verge of reopening.

Already, Brent crude, oil's international standard, surged as much as 4% on Wednesday on the back of the traffic jam.

Dozens of ships have lined up around the blockage, and a Wednesday statement from Ever Given's shipping company said "no progress has been made"