As the prospect of the Suez Canal blockade turning into the longest accidental shutdown of this vital trade passage looms, the resulting impact on crude and tanker prices could gradually manifest in the form of a rising crude prices. This could potentially affect retail prices.
India – biggest importer via Suez
India is the top importer of crude and products through the Suez Canal, higher than China, South Korea or Singapore, according to data from Vortexa. And more than two-thirds of India’s crude comes from the Gulf region.
In an analysis of the blockade, Vortexa noted Thursday: “If the problem is not resolved today, it will begin to have implications for larger trade flows and shipping sectors. If not resolved by the coming spring tide (March 27/28), it will begin to affect larger scale refining operations ”. For India, however, the main blow was seen on ethane imports and exports with the United States, as well as crude imports from Latin America, the use of which has recently increased.
India imports around 500,000 barrels per day of crude through the Suez Canal, followed by China, which imports just over 400,000 barrels per day, and South Korea and Singapore, which import just under 400,000 barrels per day from the Suez Canal, according to Vortexa. According to some sources, at its peak in December 2020, India imported nearly 5 million barrels of crude oil per day. Among the exporters of crude products via the Suez Canal, India ranks sixth behind Russia, Saudi Arabia, Iraq, Libya and Algeria with just under 200,000 barrels per day.
The longer the heist, the greater the impact.
The biggest impact on the oil trade and crude prices will be if the release of the “Ever Given” container ship takes weeks, as currently expected. The longer the closure, the more likely the impact is disruptive. The 440-meter-long, 59-meter-wide vessel is severely jammed, with its bow crowded on the east side of the canal and its stern on the opposite side.