2023-12-18 16:37:13
BP Plc said it will halt all shipments through the Red Sea following the escalation of attacks on merchant ships, adding to signs that trade through vital waterways is at a standstill.
BP’s decision, the most tangible sign of disruption to energy flows since the start of the Hamas-Israel war, comes days after all of the world’s major container shipping lines announced they would temporarily shut down. Norway’s Equinor ASA made a similar announcement hours later.
The measures came when a fuel tanker was hit by an “unidentified object” on Monday, according to its owner. Attacks now occur almost daily. An insurance committee that assesses maritime risk has expanded the area of the Red Sea that it considers to be the most dangerous.
The disruptions are a stark reminder of the inflationary and economic pressures that make area security a top priority. The US and its allies are working on a plan to do so, but it has not yet been finalized. Avoiding the Red Sea means sailing around Africa, adding thousands of kilometers to journeys and delaying cargo deliveries.
There are 46 ships that have diverted to the southern tip of Africa instead of using the Red Sea and another 78 are awaiting instructions, Ryan Petersen, founder of logistics company Flexport, said on X.
The diversion means ships cannot use Egypt’s Suez Canal, a channel for 12% of global maritime trade. This comes at a time when an alternative trade route – the Panama Canal – has also been restricted due to the drought.
Israel Connection
The Iran-backed Houthis say they are targeting any ship with ties to Israel in response to the country’s war with Hamas. Those links appeared increasingly tenuous over the past week, and the owner of the tanker that was attacked on Monday, the Swan Atlantic, said there was no connection.
“There is no Israeli connection in the (Norwegian) ownership, (Singapore) technical management of the ship, nor in any part of the logistics chain of the cargo transported,” Rieber & Son said in a statement on its website.
Oil and gas
The price of natural gas in Europe rose by up to 13%. Brent crude futures also rose to $78.73 a barrel.
BP’s measure applies to all ships it owns and charters. BP and Equinor’s approach will put pressure on other companies to follow suit.
The Norwegian oil and gas company is closely monitoring the situation and is in dialogue with the owners of ships transporting goods on its behalf and “other players in the industry”.
#halt #tanker #transits #Red #Sea #Brent #crude #soars #barrel