On 23rd March, 2021, the Suez Canal, was blocked after a large cargo ship ran aground while passing through it.
The vessel blocking Suez was the Ever Given – a Panama-registered container ship that was on its way to Rotterdam in the Netherlands from China, got stuck here due to a mishap caused by bad weather.
Temporary Impact due to Blockage
Over 200 ships got stuck on both sides of the canal putting stress on global supply chains.
This route is used for Indian exports/imports worth USD 200 billion to/from North America, South America and Europe. It includes petroleum goods, organic chemicals, iron and steel, automobile, machinery, textiles and carpets, handicrafts including furniture, leather goods, etc.
The incident also raises questions about finding solutions to prevent future accidents and reducing the global dependence on this narrow waterway.
About Suez Canal
The Suez Canal is an artificial sea-level waterway(193 km)in Egypt, connecting the Mediterranean Sea to the Red Sea through the Isthmus of Suez; and dividing Africa and Asia.
Constructed by the Suez Canal Company between 1859 and 1869, it officially opened on 17 November 1869. It was nationalized in 1956 by Egypt’s then leader Gamal Abdel Nasser.
It is the longest canal in the world without locks which extends from the northern terminus of Port Said to the southern terminus of Port Tewfik at the city of Suez.
Significance of Suez Canal
Important World Trade Route: About 12% of world trade passes through the canal each year, everything from crude oil to grains to instant coffee. Because it has no locks, it can even handle aircraft carriers.
Unique Location: The Suez Canal is considered to be the shortest link between the east and the west due to its unique geographic location.
Significance for India
India is the top importer of crude oil and products via the Suez Canal, importing around 500,000 barrels per day of crude products.
Among exporters of crude products via the Suez Canal, India is sixth in the pecking order behind Russia, Saudi Arabia, Iraq, Libya and Algeria at a little less than 200,000 barrels per day. The canal experiences less piracy activities as compared to the other routes, making it a secure route.
