The Suez fiasco: oil prices jump as the world's favorite shipping shortcut gets blocked
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If all roads lead to Rome... then all waterways lead to the Suez. Egypt's famous canal is the most important shortcut in global shipping. It provides the fastest link between Europe's Mediterranean waters and the seas surrounding Asia. Instead of going all the way around Africa, ships can sail straight from Saudi Arabia or India into Europe. So it's unfortunate that...
- The Suez Canal has been blocked by one of the world's largest container ships. The "Ever Given" has been ever-stuck for three days, causing a major traffic jam.
- "Days to weeks"... How long it could take to move the ship. Experts are digging sand from under it, and trying to straighten it with tugboats.
The Diagon Alley of the seafaring world.... A whopping 12% of global trade passes through the Suez. This Ultimate Traffic Jam is bringing billions of dollars of trade to a standstill: each day of blockage disrupts ~$9B+ worth of goods. Yesterday, at least 150 ships loaded with cargo were waiting to pass through the Suez — and many are carrying oil from the Middle East.
- Oil prices soared yesterday, as massive oil tankers were halted by the jam. ~10% of total seaborne oil trade passes through the Suez.
Technology evolves, but some things never change... We’re used to seeing things magically appear at our doorstep. We can get gas in the tank at the swipe of a card, and food in our hands with a tap. But the “backend” of logistics that provides the materials fueling our lives still relies on a few key routes. This Suez fiasco highlights the potential fragility of global trading systems — and the crucialness of the un-techy parts.