Following insurgent assaults, BP suspends all Red Sea shipments

Following insurgent assaults, BP suspends all Red Sea shipments

Following insurgent assaults, BP suspends all Red Sea shipments

Petroleum major BP has decided to suspend all oil shipments via the Red Sea in response to recent vessel attacks carried out by Houthi militants. The company attributed the “deteriorating security situation” in the region to the Houthis, which are backed by Iran and are believed to be targeting ships destined for Israel. Numerous goods companies have halted operations due to the ongoing assaults.

The United States declared that it would lead an international naval operation to safeguard ships along the route in response to BP’s announcement. The security body is comprised of the United Kingdom, Canada, France, Bahrain, Norway, and Spain, among others. BP stated that it would continue to monitor the region and maintain its “precautionary pause under ongoing assessment.”

On Monday, the international benchmark Brent oil price increased 2.6% to nearly $79 per barrel. The Red Sea is an extremely vital shipping route for consumer products and liquefied natural gas, in addition to oil.

A major shipping company announced on Monday that it would no longer transport cargo from Israel via the Red Sea. Ships will be required to circumnavigate southern Africa via a longer route rather than traversing the Bab al-Mandab Strait. 

Israel initiated a military operation in Gaza subsequent to the 7 October attacks, which were executed by Hamas and resulted in the loss of 1,200 lives. The health ministry in Gaza, which is under the control of Hamas, has reported over 18,700 fatalities since the onset of the conflict. The exact destination of all the vessels targeted by Houthi rebels, which appeared to be Israel, remains uncertain.

The owner of the MT Swan Atlantic stated that the vessel was struck by a “unidentified object” in the Red Sea off the coast of Yemen on Monday, in the most recent documented attack, despite the absence of any connections to Israel.

Recent days have seen an increase in ship attacks, prompting shipping companies to halt voyages through the strait connecting Djibouti and Eritrea on the African coast and Yemen on the Arabian Peninsula.

It provides ships approaching the Suez Canal from the south with access to a significant shipping lane. Maersk, the second-largest maritime company in the world, labelled the situation “alarming” on Friday, following two container ship attacks and a “near-miss” incident involving Maersk Gibraltar.

The largest shipping conglomerate in the world, Mediterranean Shipping Company (MSC), subsequently announced that it, too, would redirect its vessels away from the region.

Inventor Chemical Tankers verified on Monday that the MT Swan Atlantic, which was en route from France to Réunion Island in the Indian Ocean, had been targeted.

The company said “the people and the ship are currently receiving assistance from the United States navy and will be taken to safety under the protection of naval troops.” No Indian crew members were harmed. Evergreen Line indicates that longer voyages between Asia and the Mediterranean, Europe, or the east coast of the U.S. would diverge around the Cape of Good Hope.

Freight rate data business Xeneta chief analyst Peter Sand said transport companies will now alert customers of cargo delays. He further stated that such situations undoubtedly incur a price.