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Oil and fuel tankers passing through the Bab el-Mandeb strait in the Red Sea have declined in numbers significantly following the string of vessel attacks from the Yemeni Houthis.
According to Bloomberg tracking data, since the start of this week only 30 tankers have passed through the chokepoint, which is one of the busiest globally. That’s a 40% decline from the average for the previous three weeks, the news outlet noted.
The Houthis who control most of Yemen started targeting vessels sailing in the Red Sea earlier this month demanding humanitarian aid for Gaza. Initially, the threat was for Israel-bound ships specifically but reports about the attacks so far suggest they are not the only ones being attacked.
All global shipping majors have announced decisions to reroute traffic away from the Red Sea and on Monday BP became the first oil major to make a similar decision. Prices immediately jumped and the U.S. said a few hours later it would organize a group of allies to step up military presence in the area to boost protection for vessels.
The rerouting of ships from the Bab el-Mandeb strait and the Suez Canal is a costly undertaking. It adds some 10-12 days to journeys as the alternative route is around the Cape of Good Hope at the southern tip of Africa. The delays will add to the costs of transporting goods and it is unclear how long the status quo will remain in place.
According to Vortexa, the increase in journey times for tankers varies between 58% and 129. The biggest increase, 129%, in the time it takes for a cargo to arrive at its destination would be on the Middle East Gulf to Mediterranean route, which would take 39 days instead of 17 days, Vortexa says.
As a result of these developments, oil prices hit a two-week high earlier this week and may even post a weekly gain.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.