Suez Canal crisis: UAE's oil exports won't be impacted, analysts say

UAE's oil exports are mainly flowing to Asian countries
The UAE’s oil exports won't be impacted by the closure of Suez Canal as most of the crude is now exported to Asian countries, says analyst.
The UAE can also channel its oil exports through the Sumed pipeline if the ongoing crisis prolongs.
Also read:
>> Suez canal chief says human error could be behind ship's grounding
>> New attempts to free huge vessel stuck in Suez Canal
“The UAE’s oil exports are unlikely to be impacted as the westward flow of oil from the Middle East to Europe had already declined, as compared to the previous years. Now, more exports are directed towards large Asian consumers like China and India. Also, huge oil containers avoid the Suez Canal,” said Vijay Valecha, chief investment officer at Century Financial.
A giant Japanese container ship has blocked the Suez Canal after it was blown off course by high ends, causing immense challenges to global exports of goods, crude oil and other commodities.
Around 19,000 vessels passed through the 193-kilometre (km) maritime shortcut last year, carrying approximately 12 per cent of global trade by volume and 10 per cent of crude oil.
Currently, more than 320 ships are waiting to pass through the Suez Canal. By circumventing, the canal could cost $300,000 more per ship.
On Friday, Reuters had reported that Abu Dhabi National Oil Company (Adnoc) has deepened crude oil supply cuts to Asian customers in June to 10-15 per cent from 5-15 per cent in May, a week ahead of an Organization of the Petroleum Exporting Countries (Opec+) meeting.
The UAE is the third biggest oil producer in Opec behind Saudi Arabia and Iraq, pumping between 2.5 million (m) and 3m barrels per day.
“Even if the situation persists, the UAE can use the Sumed pipeline, which can pump 2.5m barrels a day of crude from the Red Sea to the Mediterranean Sea, avoiding the canal. Moreover, the world has ample crude oil inventories,” Valecha said on Sunday.
However, if this crisis persists, then it could lead to inflation, he added.
“The supply chain bottleneck could make the price of goods used in everyday consumption dearer. But the crisis anyway is not expected to last longer, and experts opine that it could be resolved in the next 10-12 days. So, the long-term impact on the UAE’s economy could be minimal,” he added.
-waheedabbas@khaleejtimes.com
-
Crime and Courts
UAE: Roommate accused of stabbing youth to death
Court postpones hearing to facilitate talks between the... READ MORE
-
Education
UAE: Some private schools to declare exam results ...
Descriptive reports being prepared for all subjects over the past two ... READ MORE
-
News
Dubai school to offer courses in gaming from...
First in the region to offer esports and game design courses from... READ MORE
-
News
Dubai Police arrest French drug lord on the run...
Moufide Bouchibi is an international kingpin, also known as 'The... READ MORE
-
Ramadan 2021
UAE Ramadan Taraweeh: Isha to be offered 5 mins...
Full list of safety rules to be followed at mosques READ MORE
-
Crime and Courts
UAE: 21-year-old ends life to avoid marrying...
The woman reportedly did not want to marry her 70-year-old suitor. READ MORE
-
Weather
UAE weather alert: Rains forecast
For the second day straight, it may rain in parts of the UAE. READ MORE
-
Ramadan 2021
Ramadan 2021: Fasting in UAE to last over 14...
Temperatures could also soar to 48°C during the Holy Month. READ MORE



News Bulletins (videos)
KT Morning Chat: UAE picks two new astronauts; it may rain today
55 votes | 11 April 2021
