Major shipping companies, oil producers and cargo owners have suspended transit through the Red Sea--one of the most trafficked water routes in the world--and are rerouting around Africa following mounting attacks on vessels by Yemen's Houthi rebels.
The Iran-backed forces have recently escalated missile and drone attacks on commercial ships in the area, mostly in the Bab el-Mandeb Strait, in response to Israel's military operations in Gaza. The attacks are disrupting maritime trade, forcing several companies to reroute their vessels via southern Africa's Cape of Good Hope--a move expected to result in extra costs and delays.
The U.S. said Monday that is has agreed with some allies to create a multinational naval task force set to protect merchant vessels transiting in the Red Sea and counter attacks on ships.
The Bab el-Mandeb Strait, the Suez Canal and the Sumed pipeline are strategic routes for oil and gas shipments to Europe and North America. According to the U.S. Energy Information Administration, total oil shipments via these routes accounted for about 12% of total seaborne-traded oil in the first half of the year, while liquefied natural gas shipments accounted for about 8% of worldwide LNG trade.
Here is a look at companies that have suspended operations in the Red Sea in the last few days:
--BP: The London-based oil-and-gas major on Monday paused tanker shipments through the Red Sea, citing a deteriorating security situation in the area.
--Equinor: The Norwegian energy company said Monday that it has chosen to reroute ships in the area and that it is in contact with owners of ships carrying cargo on its behalf as it closely monitors the situation.
--Evergreen Marine: The shipping company on Monday temporarily suspended Israel import and export services until further notice, citing rising risks.
--Hapag-Lloyd: The German shipping giant said Monday that it will reroute several ships via the Cape of Good Hope until the passage through the Suez Canal and the Red Sea are safe again, just days after suspending traffic through the Red Sea following an attack on one of its ships.
--MSC: The Swiss-based container shipping company said Saturday that its ships won't transit the Suez Canal eastbound and westbound, and that some services will be rerouted via the Cape of Good Hope after one if its ships was attacked while transiting the Red Sea.
--CMA CGM: The unlisted French shipping-and-logistics company on Saturday instructed its ships scheduled to pass through the Red Sea to pause their journeys and reach safe waters until further notice, saying it is deeply concerned about recent attacks on vessels.
--A.P. Moller-Maersk: The Danish shipping major on Friday paused all journeys through the Red Sea until further notice after attacks on its ships.
OIL AND GAS PRICES: Oil prices are steady on Tuesday as investors weigh the impact of Red Sea disruptions on the oil market. The international oil benchmark, Brent crude, is flat at $77.96 a barrel a day, while the U.S. oil gauge WTI is up 1% at $72.87 a barrel a day, after they both climbed on Monday over fears of intensifying attacks and disrupted trade. The European gas benchmark Dutch TTF is currently down 6.4% at EUR33.25 a megawatt hour.
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(END) Dow Jones Newswires
12-19-23 0709ET
