Renewable energy developments are advancing…
China has benefited from the…
The Yemeni Houthis have attacked a U.S. ship in the Red Sea in retaliation for strikes that U.S. and UK forces carried out on land targets in Yemen last week.
Per the AP, the Houthis shot an anti-ship cruise missile at a U.S. destroyer in the Red Sea but a fighter jet shot it down.
As the conflict escalates, most shipping operators have diverted their vessels from the Bab el-Mandeb – Suez Canal route, adding more than a week to average journeys between Asia and Europe, and seeing higher freight rates because of the longer journeys.
Tanker traffic has also been diverted after the latest escalation, with oil prices responding by moving higher. Last week, right after the U.S. and UK strikes on Yemen, Brent crude touched $80 per barrel briefly.
Meanwhile, three tanker operators confirmed that they have stopped moving commodities via the Red Sea, CNBC reported last Friday. Hafnia, Torm, and Stena Bulk were no longer directing their vessels to the Bab el-Mandeb strait on advisory from the U.S.-UK joint forces in the Red Sea dubbed the Combined Military Forces.
Qatar, meanwhile, just announced it would no longer send LNG cargos via Bab le-Mandeb either. This is a blow to European buyers of Qatari LNG since the Red Sea route is the shortest—and cheapest—one.
Bloomberg reports, citing cargo-tracking data, that at least five LNG carriers due to pass through the Bab el-Mandeb strait had been halted since Friday. Three of these were idling off the coast of Oman, one was in the Red Sea, and last one was near the Suez Canal, the report said.
“The situation is dynamic and ships should consider holding outside of the area while a period of taking stock of the situation is undertaken until daylight on Saturday 13 January,” the International Association of Independent Tanker Owners said in a statement, cited by CNBC.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com