Low oil prices undermined the status of the Suez Canal. They say most ships find it cheaper to sail around Africa rather than sailing through the Suez Canal. Some market observers believe that the oil market crash resulted in multiple consequences. On top of billions of dollars of lost profits by the world's biggest oil exporters, sailing around Africa is no said to be cheaper than saving time by passing through the Suez Canal.
For those of you who don’t know, this was one of the world’s biggest construction projects of the 19th century. Almost 1,5 million workers participated in the construction of the Suez Canal. Many of them died during the process that took as much as 20 years. After the grand opening in 1869, ships got a shortcut way from the Red Sea to the Mediterranean Sea, thereby saving a couple of weeks. This was a true revolution in international trade. For many businesses worldwide passing through the Suez Canal became a vital necessity. The Egyptian owners of the Suez Canal used to make billions of dollars a year. Nothing fancy given he fact that the Suez Canal allows you to save, for instance, 6 500 kilometers if you are going from Singapore to Rotterdam. This is a huge time-saver and money-saver for ship owners! Still, more and more ships start sacrificing time for money by going around Africa. For example, it is reported that over 100 ships went that way over the period of October through late December 2015.
Today it looks weird. According to АК OPIS Tanker Tracker experts specializing in oil shipments by sea, the fuel for ships got cheaper and that is why oil shipments got cheaper as well. With that being said, some companies don’t want to pay for passing through the Suez Canal.
Still some experts are wondering whether it is worth wasting time in order to save money? According to some experts working for Maersk (Denmark ), a ship going around Africa at a speed of 25 km/h is going to spend 11 days more than on passing through the Suez Canal. Still, the Suez Canal is a costly shortcut. Some ships have to pay as much as 350 000 dollars to get through the canal, not to mention some other taxes and duties. For some ships, the cost is even higher. On top of those irritating factors, we should keep in mind some other peculiarities. At the same time, some oil traders prefer to keep crude oil and wait from higher prices.
