LNG Carriers Avoid Suez Canal Amid Security Concerns

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According to recent data from the United Nations Conference on Trade and Development (UNCTAD), no LNG (Liquefied Natural Gas) carrier has transited the Suez Canal for over 65 days, says an article published on splash247 website.

Summary

  • Recent data from the United Nations Conference on Trade and Development (UNCTAD) reveals that no LNG (Liquefied Natural Gas) carrier has transited the Suez Canal for over 65 days, highlighting heightened security concerns in the Red Sea region.
  • The last LNG ship to navigate the Egyptian waterway did so on January 16, prompting gas carriers to reroute their journeys, circumventing Africa, due to security risks.
  • Among all major commercial shipping segments, LNG carriers have notably avoided the Suez Canal in recent months, as indicated by UNCTAD data, reflecting the significant impact of security concerns on the LNG segment.

Security Concerns Prompt Rerouting

The last LNG ship to navigate the Egyptian waterway did so on January 16. Since then, heightened security risks in the Red Sea region have prompted gas carriers to reroute their journeys, circumventing Africa.

LNG Segment Particularly Affected

Among all major commercial shipping segments, LNG carriers have notably avoided the Suez Canal in recent months, as highlighted by UNCTAD data.

Decline In Overall Trade Volumes

Trade volumes passing through the Suez Canal have seen a drastic decline, with the International Monetary Fund reporting a 50% year-on-year decrease in the first two months of 2024. Meanwhile, trade routes around the Cape of Good Hope have experienced a surge of approximately 74%.

Revenue Impact On Egypt

The reduction in Suez Canal transits is expected to significantly impact Egypt’s revenue. In 2023, the canal generated $10.25 billion for the country. However, the Suez Canal Authority anticipates a considerable drop in revenue to around $5 billion for the current year.

Decrease In Gulf Of Aden Vessel Arrivals

Data from Clarksons Research indicates a substantial decline in total vessel arrivals in the Gulf of Aden for all merchant ship types. Compared to levels recorded in the first half of December, vessel arrivals stand at 72% below.

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Source: splash247