Following a dust storm and high winds on March 23, a 1,312 foot long (400 m) container ship named Ever Given got stuck in the Suez Canal, creating global ripple effects as it totally disrupted traffic in both directions.
Attempts to remove the ship have so far been futile, and the world economy is on the verge of a "new Suez Crisis," with over 200 vessels stranded on either side of the canal.
What is the Suez Canal?
The Suez Canal, which was built in 1869, connects the Red and Mediterranean seas. The man-made canal in Egypt separates Asia and Africa and is the shortest route between Europe and the western Pacific and Indian Oceans, making it a crucial shipping route for millions of tonnes of cargo per year.
The canal, which links two large regional economies, enables a substantial amount of trade. In 2020, the Suez Canal Authority (SCA) announced that 19,000 vessels sailed through its waters, an average of 52 per day. More than 10% of global seaborne trade and a comparable amount of crude oil flow through the 120-mile waterway.
Did you know? The Suez Canal was developed by Frenchman Ferdinand de Lesseps, who in the 1880s made an unsuccessful attempt to develop the Panama Canal
What was the first Suez Crisis?
The first Suez Crisis occurred on October 29, 1956, when Israel invaded Egypt, which was quickly followed by Britain and France.
In July 1956, Egyptian President Gamal Abdel Nasser nationalised the Suez Canal, sparking the war.
Previously, the canal was mainly operated by Britain and France, and it was a lucrative waterway that controlled about two-thirds of Europe's crude.
The British and French troops landed at Port Said and Port Fuad, and took possession of the area around the Suez Canal.
However, as they were behind schedule, it gave the Soviet Union the time to respond.
The Soviets, keen to capitalise on Arab nationalism and establish a foothold in the Middle East, began selling arms to Egypt's government from Czechoslovakia in 1955, and later supported Egypt in the building of the Aswan Dam on the Nile River after the US failed to fund the initiative.
Nikita Khrushchev, the Soviet general, denounced the attack and vowed to launch nuclear weapons at Western Europe unless the Israeli-French-British force withdrew.
Why did the US intervene in the Suez Crisis?
President Dwight Eisenhower warned the Soviets that reckless talk of nuclear war would exacerbate the situation, and advised Khrushchev to avoid intervening directly in the conflict.
Eisenhower also gave strong threats to the French, British, and Israelis, urging them to abandon their campaign and pull out of Egypt.
The US President was enraged that the British, in particular, had failed to keep him aware of their plans. The US threatened all three nations with economic sanctions if they persisted in their attack and the threats were successful. By December, the British and French forces had withdrawn, and Israel had eventually caved in to US pressure in March 1957, relinquishing control of the canal.
The Suez Crisis was the first time a UN peacekeeping force was deployed. The United Nations Emergency Force (UNEF) was an armed force sent to the region to oversee the cessation of war and the evacuation of the three invading powers.
What were the consequences?
Britain and France both lost ground in the Middle East as a result of the crisis, which marked the beginning of Britain's fall in global power.
Two months after forces were withdrawn, British Prime Minister Anthony Eden resigned.
Israel did, however, accomplish some of its objectives, regaining maritime privileges in the Straits of Tiran.
Following the crisis, President Nasser became a strong hero figure for Arab and Egyptian nationalist movements.
Egyptian President Anwar el-Sadat reopened the canal in 1975 as a goodwill measure, the waterway continues to hold a vice-like grip on global commerce.
Implications of the blockage
The blockage of such a vital shipping lane is bound to have consequences. According to Lloyd's List, every day the Suez Canal is closed, over $9 billion worth of goods trade is interrupted, reported Visual Capitalist.
European officials have also expressed concern about the long-term consequences of the blockage once it is cleared. A huge influx of ships could create massive congestion in European ports, upsetting supply chains even more.
Financial Times reported that crude oil prices have risen, tankers and freight ships are congested, and vendors of everything from oil to televisions are considering sending their shipments around the Cape of Good Hope, possibly adding a week to delivery times and substantial additional costs.