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Maersk Rules Out Suez Canal Return Until 'Well Into 2025'

Maersk containers are transported by train in Ronda, Spain October 27, 2024. REUTERS/Jon Nazca
Maersk containers are transported by train in Ronda, Spain October 27, 2024. REUTERS/Jon Nazca
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Maersk Rules Out Suez Canal Return Until 'Well Into 2025'

Maersk containers are transported by train in Ronda, Spain October 27, 2024. REUTERS/Jon Nazca
Maersk containers are transported by train in Ronda, Spain October 27, 2024. REUTERS/Jon Nazca

Danish shipping group A.P. Moller-Maersk said on Thursday it expects strong demand for shipping goods around the globe to continue in the coming months, though does not expect to resume sailing through the Suez Canal until "well into 2025.”
Attacks on vessels in the Red Sea by Iran-aligned Houthi militias have disrupted a shipping route vital to east-west trade, with prolonged re-routing of shipments pushing freight rates higher and causing congestion in Asian and European ports.
"There are no signs of de-escalation and it is not safe for our vessels or personnel to go there ... Our expectation at this point is that it will last well into 2025," Chief Executive Vincent Clerc told journalists, according to Reuters.
Maersk, viewed as a barometer of world trade, said in January it was diverting all container vessels from Red Sea routes around Africa's Cape of Good Hope for the foreseeable future.
The company said on Thursday it had seen strong demand in the third quarter especially driven by exports out of China and Southeast Asia.
Clerc said he saw no signs of a slowdown in volumes from Europe or North America in the coming months.
Maersk also confirmed robust preliminary third-quarter earnings released on Oct. 21 driven by high freight rates, when it also raised its full-year forecasts citing solid demand and the continuing disruption to shipping in the Red Sea.
Maersk's shares rose 2.4% by 0957 GMT.

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Oil Retreats on US Tariff Uncertainty and OPEC+ Supplies

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Retreats on US Tariff Uncertainty and OPEC+ Supplies

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices slipped on Thursday as the possibility of US tariffs being reinstated raised demand concerns ahead of an expected supply boost by major producers.

Brent crude futures fell 58 cents, or 0.8%, to $68.53 a barrel by 0942 GMT. US West Texas Intermediate crude declined 57 cents, or 0.9%, to $66.88.

Both contracts had hit one-week highs on Wednesday as Iran suspended cooperation with the UN nuclear watchdog, raising concerns the lingering dispute over its nuclear program could again devolve into armed conflict.

A preliminary trade deal between the US and Vietnam also boosted prices.

Tariff uncertainty looms large, however. The 90-day pause on the implementation of higher US tariffs ends on July 9, with several large trading partners yet to wrap up trade deals, including the European Union and Japan.

The OPEC+ group of oil producers, meanwhile, is expected to agree to raise output by 411,000 barrels per day (bpd) at its policy meeting this weekend. Adding to negative sentiment, a private-sector survey showed that service activity in China - the world's biggest oil importer - expanded at its slowest pace in nine months in June as demand weakened and new export orders declined. A surprise build in US crude inventories also highlighted demand concerns in the world's biggest crude consumer.

The US Energy Information Administration said on Wednesday that domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels.

The market will be watching for the US monthly employment report on Thursday, which is likely to shape expectations over the depth and timing of interest rate cuts by the Federal Reserve in the second half of the year, analysts said.

Lower interest rates could spur economic activity that would boost oil demand.