Tag Archives: Suez Canal

Ever Given container ship blocking Suez Canal ‘partially’ refloats on March 29; disruptions to continue over coming days at least – Suez Canal Situation Update

Please be advised:

Re-floating of Container Ship

Reports from the morning hours of March 29 (local Egyptian time) indicate that a stranded Panama-flagged, Japanese-owned container ship, Ever Given, that has been blocking the Suez Canal for six days, was “partially” re-floated.
According to a maritime services company, the vessel was refloated at 04:30 (local Egyptian time) and is currently being secured. The breakthrough in attempts to refloat the ship reportedly occurred after 27,000 cubic meters of sand were dug out following a six-day operation involving tugboats and dredgers.
Tug boats are now reportedly operating at the site of the vessel to “straighten its course”. Additional reports citing “sources working inside the canal” said it had been refloated “roughly 65 percent of the way”.
The ship has moved approximately 23 meters at the time of writing, which was reportedly aided by “higher-than-usual” spring tides.
Suez Canal Authority (SCA) Chairman, Osama Rabie, reportedly stated on March 29 that “we are not finished yet, but it [the container ship] has moved”.
Video footage on social media appears to depict that the stern of the boat has moved away from Suez Canal’s eastern bank.
Satellite imagery of the container ship indicates that it has been dislodged from the eastern bank of the Canal and is still surrounded by tug boats.
The 222,000-ton, 400 meter-long vessel, Ever Given, is one of the world’s largest container ships, with a 20,000 container capacity.

Backlog of Vessels & Economic Impact

As of March 28, there were reportedly at least 369 ships stuck in a queue waiting to pass through the 193 km Suez Canal on both sides of the blockage.
These include “dozens” of “container ships, bulk carriers, oil tankers, and liquefied natural gas (LNG) vessels”, per March 29 reports citing the SCA’s Rabie.
It remains unclear when the Suez Canal will open to traffic.
Following the reported re-floating of the ship, oil prices fell. Brent crude went down by one USD to 63.67 USD per barrel.

Assessments & Forecast:

The partial refloating of the Ever Given constitutes a breakthrough in the ongoing six-day operation to dislodge the vessel from the eastern bank of the Suez Canal after it ran aground on March 23. The “higher than usual” spring tides likely contributed significantly to the freeing of the ship and bolstered the efforts by tug boats and dredgers, which had made progress from March 26 onwards by freeing the ship’s rudder and turning on the engines of the vessel. FORECAST: The ongoing rescue effort will likely require dredgers to remove large quantities of sand around the ship’s bow, which could take several days. Thus, given that the cargo vessel has only partially refloated and will require extra work to completely refloat and thereafter continue its journey through the Suez Canal, there are likely to be continued disruptions to travel through the waterway. This is also due to the immense backlog that has formed at the waterway, with a reported 369 ships stuck in a queue to pass through the Canal.
FORECAST: Regardless of the dislodging of the container ship, the minimum six-day suspension of traffic through the Suez Canal, through which approximately 13 percent of global maritime trade, ten percent of oil shipments, and eight percent of LNG transit, will continue to have an impact on global supply chains over the coming days and possibly weeks. This has and will continue to primarily impact Asian and European-based companies initially, as the Suez Canal serves as a major maritime route for transit between these regions. However, it is liable to have a knock-on effect on other parts of the world by increasing delays and costs to importers and exporters of goods that are essential for assembly lines and retail. To mitigate this risk, the SCA may increase the number of ships that can pass through the canal, which reportedly is capped at a daily maximum of 106. This, in turn, may carry additional risks to vessels transiting through the area due to the difficulty in coordination with authorities and other ships, which will increase the chance of a miscalculated error. Moreover, although the increased number of vessels will facilitate continued transit by the vessels, destination ports in Europe such as Rotterdam and Antwerp, will face significant challenges in processing and unloading the increased quantities of cargo, which will increase delays at these locales and also add to the potential for error.
The financial impact of the incident has been substantial and this is unlikely to subside over the coming days due to the backlog. Each day of continued blockage is estimated to disrupt approximately 9.6 billion USD of goods. Moreover, the cost of renting a cargo ship along routes between Asia and the Middle East has reportedly increased by up to 47 percent since March 23. This will be exacerbated by the costs incurred by shipowners that rerouted down the coast of Africa via the Cape of Good Hope, which will have added over a week, at the very least, to travel time. This will have a significant impact on fuel and operating costs as well as the potential penalties incurred by businesses due to the late delivery of goods.
FORECAST: As previously assessed, the economic fallout from this maritime incident will also have an impact on insurance premiums, both in the immediate short-term and also over the coming months. Reports from March 26 stated that over three billion USD has been prepared for liability claims against the owner of the Ever Given. However, this may not be enough to cover the potential claims of the over 300 vessels stuck in the Suez Canal due to its blockage. Moreover, some of the vessels may seek to file claims against both the stranded ship’s insurer and their own, which would lead to substantial payouts and a long-term impact on insurance premiums for those traveling through the Suez Canal. This is especially due to the global coverage of the event, which will elevate perceptions of the risk attached to transit through the waterway.
For Egypt specifically, this event is likely to have an adverse impact on its economy and international standing. In 2020, Egypt received 5.6 billion USD in revenue from travel through the Canal, which constituted two percent of its GDP and was a critical source of foreign currency for the country. Moreover, in 2015, President Abdel Fattah al-Sisi launched an 8.5 billion USD expansion of the Suez Canal, naming it the “New Suez Canal” in an effort to increase traffic through the strategic waterway. This project has failed to significantly increase revenue as expected and the current global attention on the Suez Canal is likely to add to the scrutiny of the waterway and its desirability as a transit route for international cargo, with other countries already proposing alternatives. Although the Suez Canal remains the shortest shipping route between Europe and Asia, the current incident highlights the fragility and potential for disruptions through the waterway. The long-term potential for alternative methods and routes for the transportation of cargo may undermine President Sisi’s and Egypt’s global status. It may also more broadly deter international investors due to the perceived inability of the Egyptian authorities to manage crises, especially due to recent indications that the running aground of the vessel may have been due to unspecified human error, which did not indicate on the part of whom, as well as inclement weather conditions.
The backlog of vessels waiting in the Red Sea also poses an underlying security risk due to the ongoing conflict between the Yemen-based Houthis and the Saudi-led Coalition that backs Yemen’s President Abdrabbuh Mansur Hadi-led government. On March 28 alone, Saudi authorities announced that two Houthi-operated explosive-laden vessels, allegedly planning an “imminent attack”, were intercepted in the Red Sea in the vicinity of Yemen’s Hodeidah Governorate. Although a significant distance from the Suez Canal, there is likely to be a large increase in shipping traffic seeking to reach the waterway in order to compensate for disruptions. These ships may need to pass through areas near Yemen and Saudi Arabia where Houthis are known to deploy naval mines and explosive-laden vessels, which will slightly increase the risk of a security incident in this area. This is even if the Houthis do not intentionally conduct an attack, which would further damage its international reputation as a credible actor in the event of damage to a vessel or casualties to its crew.

Recommendations:

Those operating vessels through the Suez Canal on March 29 and over the coming days are advised to allot for disruptions to business continuity, including delivery delays, due to the ongoing cessation of maritime navigation through the waterway.
Remain apprised of notifications issued by the Suez Canal Authority over the coming days for updates on the situation and any instructions for maritime operators to avoid further congestion of the strategic waterway.

Potential for militancy, protest activity heightened during March 26-28 elections; major instability as seen in past years unlikely – Egypt Analysis

Current Situation

On March 26-28, Egypt will hold Presidential elections. Current President Abdel Fatah al-Sisi will be running for reelection against El-Ghad Party leader Moussa Mostafa Moussa.

Moussa has stated that he supports al-Sisi for president, despite his own candidacy. Numerous political opposition leaders declared a boycott of the elections, in protest of the current administration’s detention and alleged pressure on previous candidates to withdraw.

The outlawed Muslim Brotherhood political organization and other anti-government groups have yet to release official calls for protests during the elections. In recent weeks, authorities announced arrests of Muslim Brotherhood elements “seeking to interrupt the elections and endanger public safety.” On less frequent occasions in past weeks, security forces apprehended militants belonging to the Hasam Movement, a militant group comprised of pro-Muslim Brotherhood elements, who were “planning to carry out attacks during the elections”.

The Islamic State (IS)-affiliated Wilayat Sinai released media on February 11 in which it threatens to attack polling stations across the country during the elections, and warned “the Muslim public” to avoid voting sites and other locales associated with the elections in view of attack operations. The Sunni jihadist group stated the Presidential elections are “the greatest form of polytheism.”

In IS’s official literature on February 15, the group encouraged attacks by its militants and supporters, stating that “attacks will show al-Sisi’s allies that he is incapable of controlling security in the main areas under his rule, let alone distant regions like Sinai, the Western Desert, and areas in Aswan and Upper Egypt.”

Assessments & Forecast

Al-Sisi likely to be reelected

Considering al-Sisi’s current competition in the election, the result is likely predetermined, and al-Sisi will be reelected for another term. Moussa’s candidacy is likely meant to provide the elections with an appearance of being democratic and to lend credibility to al-Sisi’s mandate as head of state upon his reelection. The successful removal of all serious candidates is indicative of the support al-Sisi maintains among Egypt’s military and security elites, who trust that he will protect their interests, especially their financial stakes and Egypt’s overall stability. The detention of two former high-ranking figures of the armed forces demonstrated this, namely former Prime Minister and Egyptian Air Force (EAF) Commander in Chief Ahmed Shafiq, and former Chief of Staff of Egyptian Armed Forces (EAAF) Sami Hafez Anan, who both subsequently left the Presidential race. Al-Sisi could not have placed these long-serving, well-connected military rivals into custody if he did not have the backing of the Supreme Council of the Armed Forces (SCAF) and the heads of Egypt’s intelligence service. In light of this, al-Sisi will likely retain this support in the coming years, rendering a change in the country’s leadership improbable.

Protests likely in lead-up, during elections, but government likely to effectively contain

Though calls for holding anti-government protests during the elections have yet to be issued, they will likely be released in the coming days, given widely held sentiments against the current leadership, and a view of the elections as undemocratic prevailing among the public. Muslim Brotherhood activists release calls for nationwide protests on a weekly basis, and the theme of their anti-government protest activity in the coming week is liable to focus on denouncing the al-Sisi Presidency and elections as illegitimate. Thus, the Muslim Brotherhood and other opposition groups will likely stage protests in conjunction with the elections.

FORECAST: The rate of protest activity will likely rise over this period relative to recent months. Some of these will be planned, and others will occur on a sporadic, spontaneous basis, likely near polling stations. The protests may devolve into civil unrest, featuring scuffles and localized clashes between participants and security personnel. This would stem from the anti-government nature of the demonstrations and heightened sensitivity over the elections. Events of this volatile nature would likely be forcibly scattered by security forces, including through the firing of tear gas and rubber bullets.

However, this period is unlikely to witness the type of destabilizing unrest seen during Egypt’s revolution and subsequent political upheaval of 2011-2013. In more recent years, the rate of anti-government protest activity and unrest has declined significantly. This is due to various government measures, including the arrests of thousands of anti-government activists and their leaders. This has left such groups without much of its capable leadership who organized political operations and demonstrations, and deprived of a large share of their membership. Citizens’ political will to engage in major protest campaigns has also likely markedly diminished, given protesters’ general lack of success in achieving their goals, and the human toll taken over the course of their pursuits.

Moreover, in advance of recent sensitive political dates and events, authorities have also closed off symbolic places previously used as protest sites, including Cairo’s Tahrir Square, as well as main thoroughfares. This has prevented protests from materializing, thus averting large-scale violent incidents as seen in 2001-2013, and stopping protest movements from gaining traction and momentum overall. Authorities will once again implement this security strategy from May 26-28, which will likely be effective overall in containing and preventing anti-government demonstrations.

Militancy threats from jihadist, disenfranchised Muslim Brotherhood groups heightened during election period

The rate of militancy-related events in mainland Egypt, including attacks and arrests of militants, has declined in recent years, and more so over past months. However, the potential for militant attacks on March 26-28 will be relatively heightened, as militant groups seek to damage al-Sisi’s reputation for tackling militancy, presenting him as unable to secure the country. A successful attack during the period of the Presidential elections would attract wide media attention for the militant group responsible, given the public and symbolic nature of this period. This would bolster the militant group’s profile, including by its members and supporters, possibly motivating further attacks and drawing recruits to its ranks. This is underscored by an IED attack targeting Alexandria’s chief of police on March 24 which authorities have stated was carried out by the Hasam Movement. A further example of such an event is the most recent attack in mainland Egypt claimed by IS, namely the operation targeting a Coptic Church in Helwan during the holiday season, on December 29, 2017.

As to the statements released by IS and its Sinai-affiliate threatening and calling for attacking polling stations and associated installations, these were likely aimed to deter Egyptians from voting, thus lowering the participation rate in the elections. This would further undermine al-Sisi’s mandate in the view of the Egyptian public, and diminish the reputation of the country’s authorities. This corresponds to IS’s overall strategy in Egypt, which is to weaken Egypt’s leadership, damage the State, in turn replacing it with an Islamic State in the future. Another Sunni jihadist group posing potential dangers during the election period, is the relatively new Jamaat Ansar al-Islam, which was responsible for the large-scale October 20, 2017 Bahariya Oasis attack. According to reports, Jamaat Ansar al-Islam has gained dozens of new members in recent months, including Islamist former members of the security forces, and an attack during the elections would greatly publicize the group’s existence and present it as especially capable.

The Hasam Movement, and similar militant groups consisting of pro-Muslim Brotherhood elements such as Liwaa al-Thawra, likely see the election period as a particularly attractive time to launch attacks. This is in response to the Muslim Brotherhood political organization’s continued banned status and removal from the sanctioned political landscape, and in response to authorities’ ongoing crackdown on the group’s members. These groups target security personnel, government officials, and those aligned with authorities. That said, bystanders face a threat of collateral damage in the event of the attacks. Overall, these groups have not been especially active of late, and the last claimed attack claimed was for an IED detonation at the Myanmar Embassy in Cairo on September 30, 2017, which Hasam claimed to have executed. However, the groups remain in operation, as indicated by periodically recorded arrests of their members over past months, and thus, they pose a persisting threat, especially during the symbolic election period.

FORECAST: Over the coming days, authorities will implement bolstered security protocols around the country, including posting additional security personnel, especially near polling stations and potential protest sites on May 26-28. Security forces will likely carry out raids targeting both militant elements and anti-government activists, to mitigate the potential for militant activity and larger-scale civil unrest to unfold. However, comparatively large gatherings of security personnel present attractive targets for militant groups, which may draw the attention of such elements during the elections. Citizens may view additional security personnel at protest sites as oppressive, exacerbating tensions between the sides, and fomenting localized unrest.

Recommendations

On March 26-28 avoid nonessential travel to the vicinity of polling stations, given the heightened threat of militancy and protests posed to these locations during this time period.

Allot for disruptions and plan alternative routes for travel due to the likely closures of main roads and thoroughfares concurrent with the elections.

Travel to Cairo and Alexandria may continue while adhering to all security precautions regarding militancy and civil unrest. Consult with us for itinerary-based travel recommendations.

Avoid all travel to the North Sinai Governorate and border areas with Libya, Sudan, and Israel due to the persistent risk for militant attacks, kidnappings, and general lawlessness.

Avoid nonessential travel to the Southern Sinai Peninsula, while maintaining heightened vigilance in the Suez Canal Zone, the Upper Nile area, and the Nile Delta region due to an increased risk of unrest and the heightened risk of militant attacks. Before traveling to Sharm al-Sheikh, confirm that flight operations are continuing and have not been impacted by recent militant threats.

In Cairo, maintain heightened vigilance and continue to allot extra time for travel due to possible delays emanating from increased security deployments, checkpoints, and closures throughout the capital.

Remain vigilant in areas surrounding and avoid the immediate vicinity of government installations, police stations, and religious centers, particularly churches, as these locations remain under elevated threat of militant attacks. When traveling in central squares, or in areas with persistent police deployments, avoid the immediate vicinity of security forces, particularly fixed traffic booths, as such personnel and facilities have increasingly come under attack by militant elements.

New military campaign in North Sinai likely linked to upcoming March 2018 presidential elections – Egypt Analysis

Current Situation

On February 9, the Egyptian Armed Forces (EAAF) Spokesperson announced the commencement of a large-scale “comprehensive” military operation to “eliminate all terrorist elements” across the country, called “Operation Sinai 2018”, with special emphasis placed on the Sinai Peninsula, Nile Delta, and Western Desert. The Spokesperson also announced an increase of the country’s alert level due to the operations.

As part of the of the campaign, the Egyptian Air Force (EAF) intensified the frequency of its airstrikes targeting militant hideouts throughout North Sinai Governorate, especially in the Rafah-al-Arish-Sheikh Zuweid triangle and Central Sinai District. The Egyptian Navy increased its activity along Sinai’s coastal region, while heightened security protocols were recorded at ports and border crossings. Security forces also increased presence in the vicinity of vital infrastructure and installations. Reports from February 9 indicate that civilian Suez Canal crossings from mainland Egypt to the Sinai, including by vessel and through tunnels, have been closed to civilian traffic due to the military campaign.

On March 8, the EAAF Spokesperson stated that Operation Sinai 2018 had yielded the deaths of 105 Islamic State (IS)-affiliated Wilayat Sinai fighters and the arrests of hundreds of the group’s militants, and that 16 soldiers had also been killed since the beginning of the campaign. The Spokesperson also announced that the EAAF destroyed 1,907 hideouts and weapon storehouses.

Assessments & Forecast

The Egyptian government has achieved partial success in containing militancy threats over the past year, with a reduction in the overall number of attacks. However, the persistence, albeit reduced frequency, of attacks in North Sinai Governorate and mainland Egypt likely motivated this recent operation, demonstrating efforts to mitigate threats from multiple groups, particularly the IS-affiliate Wilayat Sinai. The large-scale attack at a mosque in North Sinai’s Bir al-Abd on November 24, 2017, which killed over 300 people, also likely triggered the operation, and it took a period of months to prepare and mobilize for the current operation.

However, considering the timing of its commencement and execution, the primary motivation for the military campaign is likely political and connected to the upcoming March 2018 presidential elections, in which President Abdel Fatah al-Sisi is the leading candidate. President al-Sisi likely initiated the operations in order to boost his status among the Egyptian populace and project an image of power, stability, and intensified efforts to tackle the threat of militancy. Al-Sisi also likely timed the operation to deflect domestic and international criticism away from the election’s perceived lack of legitimacy and toward the issue of counter-terrorism, following the withdrawal or arrest of most of his electoral opponents over the past several weeks. To a lesser but still significant degree, the operation was also likely launched to draw attention away from Egypt’s poor economic conditions and towards a different public issue, namely militancy, and measures taken by authorities to tackle it.

The operations also follow international media reports about Israeli airstrikes against Wilayat Sinai in North Sinai in recent years. The Egyptian government likely intends to use the operations to demonstrate their sovereignty over North Sinai Governorate and their ability to mitigate militant threats with their own forces. This is particularly likely in light of the heightened criticism regarding al-Sisi’s close cooperation with Israeli authorities vis-a-vis the threat of militancy stemming from Wilayat Sinai elements.

Strategically, the nationwide campaign aims largely at isolating Wilayat Sinai militants in North Sinai Governorate. The reported closure of Suez Canal crossings to the movement of civilians, as well as the intensified activity by the Egyptian Navy along the Sinai coastal region, are meant to prevent reinforcements and smugglers from aiding Wilayat Sinai militants, thus putting further pressure on the Sunni jihadist militant group in North Sinai Governorate. The heightened security measures in the vicinity of vital infrastructure and installations likely were put in place to prevent reprisal attacks by militants, which in turn, would embarrass the Egyptian authorities.

FORECAST: The EAAF will likely continue implementing a strategy aimed at further isolating Wilayat Sinai militants in their aforementioned strongholds of Central Sinai Distinct and the Rafah-al-Arish-Sheikh Zuweid triangle. By carrying out simultaneous assaults on these two areas, the EAAF likely seeks to fix militants in their positions, preventing them from reinforcing the two respective areas or conducting attacks to the rear of security forces. The intensified aerial bombardments are meant to hamper militant movements, which in turn, may impede their ability to regroup or conduct attacks in order to force the deployment of Egyptian troops away from the frontlines. Furthermore, tighter inspection is liable to be enforced between Egypt and Gaza at the Rafah border crossings.

Israel permitted Egypt to deploy a large amount of forces into Sinai, as according to the 1979 Egypt-Israel Peace Treaty, Israeli permission is required for such a move. This highlights the increased coordination between the two countries, as they both perceived Wilayat Sinai as a strategic threat. In order to complicate and discourage the security coordination between the two countries, Wilayat Sinai may target southern Israel with rocket fire over the coming days and weeks. While in the short-term, the number of Wilayat Sinai attacks may decrease, given precedent of previous operations by the EAAF in North Sinai Governorate, over the coming months the Sunni jihadist militant group will likely renew its elevated activity in the region. The group will likely lower its profile in order to facilitate this, which would enable it to regroup and carry out multiple attacks against Egyptian security forces.

Recommendations

Travel to Cairo and Alexandria may continue while adhering to all security precautions regarding militancy and civil unrest. Consult with us for itinerary-based travel recommendations.

Avoid all travel to the North Sinai Governorate and border areas with Libya, Sudan, and Israel due to the persistent risk for militant attacks, kidnappings, and general lawlessness.

We further advise to avoid nonessential travel to the Southern Sinai Peninsula, while maintaining heightened vigilance in the Suez Canal Zone, the Upper Nile area, and the Nile Delta region due to an increased risk of unrest and the heightened risk of militant attacks. Before traveling to Sharm al-Sheikh, confirm that flight operations are continuing and have not been impacted by recent militant threats.

As a general security precaution, remain vigilant in areas surrounding and avoid the immediate vicinity of government installations, police stations, and religious centers, particularly churches, as these locations remain under elevated threat of militant attacks. When traveling in central squares, or in areas with persistent police deployments, avoid the immediate vicinity of security forces, particularly fixed traffic booths, as such personnel and facilities have increasingly come under attack by militant elements.