LNG and Product Ships Seen Rising If Egypt Turmoil Affects Canal

Egyptian-Japanese Friendship Bridge suez canal ship shipping capesize bulk carrier
A capesize bulk carrier approaches the Egyptian-Japanese Friendship Bridge, aka
Suez Canal Bridge. Image by Aashay Baindur
By Isaac Arnsdorf

July 11 (Bloomberg) — Rates to ship liquefied natural gas and petroleum products would jump if turmoil in Egypt disrupts the Suez Canal, extending the historical effect on crude-oil tankers, according to Wells Fargo Securities LLC.

“While crude tankers typically garner the quickest and the steepest Suez risk premium amid any expected or real risk to the canal, given changing global trade patterns, specifically higher volumes of LNGand refined product (and less crude) moving through the canal compared to previous periods, we believe LNG carrier rates and product tanker rates are much more likely to see significant upside potential should the canal close compared to past cycles,” Michael Webber, a New York-based analyst at the bank, said in an e-mailed report today.

The canal was “secure” and ship traffic along the waterway was normal, Tarek Hassanein, a spokesman for the Suez Canal Authority, said yesterday by e-mail.

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