Oil prices rise to $65 as Suez Canal crisis ends

Brent, the benchmark for Nigeria’s crude oil prices, traded up on Tuesday morning as news quickly spread in the market that the vessel that blocked the Suez Canal for days which disrupted 12 percent of total global trade flows had finally been freed.

On Tuesday morning, Brent futures rose 1.5 percent to $65.5 a barrel while West Texas Intermediate (WTI) traded up $0.46 per barrel to $61.64 per barrel.

The vessel known as the Ever Given had caused a major traffic jam in the Canal, which held up oil tankers in the area for days. Around one million barrels of oil and roughly 8 percent of liquefied natural gas pass through the canal each day.

Tug boats had spent several hours on Monday working to free the bow of the massive vessel after dislodging the stern earlier in the day.

Marine traffic websites showed images of the ship away from the banks of the Suez Canal for the first time in seven days following an around-the-clock international effort to reopen the global shipping lane.

The successful refloating was met with triumph and relief, as hundreds of vessels that have been trapped since last Tuesday prepare to restart their journeys.

Canal traffic is soon expected to be moving once again but will take some time to clear the 360-strong backlog of vessels that has since accumulated in the narrow waterway that sees nearly 2 million barrels of crude oil pass through it every day.

Although there has been chatter among the backed-up vessels that some of them may get moving as soon as today, according to the Wall Street Journal, oil prices remained up on the day, with the market now eyeing the upcoming Organisation of Petroleum Exporting Countries (OPEC)+ decision, which most analysts expect will be to keep the current level of production quotas intact through May.

An anonymous Reuters source suggested on Monday that Russia would once again look for an increase for its own production—a concession it was granted last time, while every other member except for Kazakhstan had to keep their production steady.

Saudi Arabia and the UAE have both spoken out in favour of keeping oil production at their current levels for at least another month, with Saudi Arabia suggesting that caution is in order given the market’s volatility.