Stock Photo: SOMKIET POOMSIRIPAIBOON / Shutterstock
By Rachel Graham (Bloomberg) BP said it will pause all its oil tanker shipments through the Red Sea following an escalation of attacks on merchant shipping by Houthi militants.
“In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea,” the company said in a statement.
The world’s largest container shipping companies have said over the past several days that they would put shipments through the waterway on hold following the wave of attacks. Several tanker owners also said they were insisting on options giving them the right to avoid the area.
Also Read: Pentagon To Launch ‘Operation Prosperity Guardian’ To Reopen Red Sea Passage
Brent oil futures rose on the news, which is probably the most concrete sign yet of disruption to petroleum flows.
Avoiding the Red Sea means ships cannot use Egypt’s Suez Canal, forcing them instead to go the long way around Africa. Doing so adds thousands of miles to voyages, delays cargo deliveries and means inflated fuel costs. It also boosts demand for vessels.
A crewing company responsible for 44,000 seafarers said earlier that it was advising owners to consider alternatives to the Red Sea.
The US and its allies are urgently considering a plan to secure the Red Sea, through which about 12% of global seaborne trade must pass.
By Rachel Graham © 2023 Bloomberg L.P.
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