In an announcement on Monday, British energy major BP announced it will be temporarily suspending all shipments of crude oil through the Red Sea due to the recent attacks in the region, adding its name to a growing list of cargo shippers which are temporarily abandoning the shipping route.
BP specifically cited the “deteriorating security situation” in the region, due to Houthi rebels based out of Yemen, which have been targeting ships traversing the region which they believe either have ties to Israel or are destined for Israeli ports.
The company said in the announcement, “The safety and security of our people and those working on our behalf is BP’s priority. We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”
Energy analysts warned that if more oil shippers followed suit, the cost of crude oil in Europe and the Mediterranean could soar.
Gregory Brew, an oil historian and analyst at Eurasia Group, noted, “Right now, it’s unclear how significant the impact will be, though if more shipping companies divert their traffic, and if the disruption lasts more than a week or two, prices are likely to climb further.”
Several freight shippers have suspended their use of the route through the southern entrance to the Red Sea, the Bab el-Mandeb Strait, following an intensification of attacks in the area recently.
The Bab el-Mandeb Strait, which connects the Red Sea and the Gulf of Aden, which leads to the Indian Ocean on one side, and the Suez Canal, which connects to the Mediterranean Sea on the other side, is a crucial pathway connecting Asia with Europe. As such, it carries about 12 percent of all global trade, including 30 percent of all international container shipments.
On Monday, Evergreen Line, one of the world’s largest shipping firms, announced that it will no longer ship Israeli cargoes through the Red Sea.
The statement released by the company said, “For the safety of ships and crew, Evergreen Line has decided to temporarily stop accepting Israeli cargo with immediate effect, and has instructed its container ships to suspend navigation through the Red Sea until further notice.”
Earlier in the day, Inventor Chemical Tankers, said that its ship, the MT Swan Atlantic, was struck by an “unidentified object” while traversing the Red Sea off the coast of Yemen, despite neither the ship nor its cargoes having any connection to Israel.
Meanwhile, Denmark shipping company Maersk and the German shipping firm Hapag-Lloyd ceased the use of the route by their ships on Friday, due to the increasing risks of attack.
Then the largest shipping company in the world, Mediterranean Shipping Company (MSC), announced it too would divert its ships around the Red Sea.
The shipping giant had reported that its box ship MSC Palatium III had been struck on December 15th. It noted, “All crew are safe with no reported injuries. Meanwhile, the vessel suffered limited fire damage and has been taken out of service.”
Its ships which would have traversed the Bab al-Mandab Strait, will now follow the longer route which travels around southern Africa.
