On The Matter Of The Suez Canal


The Suez Canal remains open for business, but there are rumours (naturally) that it could be shut due to the political situation.

Here’s a brief commentary from a buy-sider:

+ TNK:  Tankers ramping on thought the Suez Canal will be shut. I say the Canal doesnt have to be shut for the tankers to move higher. 1) shippers will immediately apply a risk premium to current and future rates, so will the insurance companies (not sure of the names)  2) Even if the canal remains open many shippers will demand to go around the Cape of Good Hope that will add approximately adding 6000 miles to journey. attached is an article by the IEA and discuss world oil choke points    http://www.eia.doe.gov/cabs/world_oil_transit_chokepoints/Full.html

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