Join our crew and become one of the 105,382 members that receive our newsletter.

qatar lng ship

A man looks as the LNG tanker DUHAIL crosses through the Suez Canal April 1, 2008. REUTERS/Stringer/File Photo

Qatar Reroutes LNG As More Tankers Avoid The Red Sea

Reuters
Total Views: 1910
January 15, 2024

By Andrew Mills and Maha El Dahan (Reuters) – Qatar’s state energy company has suspended liquefied natural gas (LNG) shipments via the Red Sea after U.S.-led strikes against Houthi militants in Yemen, joining other firms pulling back from the crucial trade route.

Attacks on ships by the Houthis, who say they are acting in solidarity with Palestinians, have disrupted global commerce and alarmed major powers in a regional escalation of Israel’s more than three-month war with Hamas militants in Gaza. 

Like a slew of other companies, the world’s second largest LNG exporter QatarEnergy has now held back at least four LNG tankers from the Red Sea, a senior source said, adding that production continues. 

That followed dozens of U.S. and British strikes on the Houthis in Yemen. They have been at war with a Saudi-led coalition for years, but have also turned their sights on the sea next to them as a way to put pressure on Israel.

In the latest action, the U.S. military said late on Sunday that its fighter aircraft shot down an anti-ship cruise missile fired by the militants toward a U.S. destroyer. No injuries or damage were reported, it said in a statement on X.

With some supply lines affected by the instability, carmaker Suzuki said production would be halted at its Esztergom plant in Hungary from Jan. 15-21 as the Red Sea attacks had delayed the arrival of Japanese-made engines. 

The Houthis have vowed to keep targeting Israel-linked ships and to give a firm response to the attacks on them.

U.S. ally Britain said it had no desire to be involved in Red Sea conflict but was committed to protecting free navigation. “Let’s wait and see what happens,” Defense Secretary Grant Shapps told Sky News regarding potential further strikes.

China, too, is worried about the implications for its major commercial interests along the Suez Canal.

‘PAUSE FOR SECURITY ADVICE’

LSEG ship tracking data showed that Qatar’s Al Ghariya, Al Huwaila and Al Nuaman vessels had loaded LNG at Ras Laffan and were heading to the Suez Canal before stopping off in Oman on Jan. 14. The Al Rekayyat, which was sailing back to Qatar, stopped along its route on Jan. 13 in the Red Sea.

“It is a pause to get security advice, if passing (through the) Red Sea remains unsafe we will go via the Cape,” the source told Reuters on Monday regarding QatarEnergy.

The longer route round Africa’s Cape of Good Hope, which various shipping firms have opted for, can add about nine days to the normally 18-day trip to Europe. 

The Qatari government and QatarEnergy did not immediately respond to requests for comment. 

The Red Sea is linked to the Mediterranean by the Suez Canal, creating the shortest shipping route between Europe and Asia, and is connected to the Gulf of Aden by the Bab al-Mandab strait between Yemen and Djibouti. 

About 12% of world shipping traffic transits the canal. 

Front-month European benchmark gas prices on the Dutch TTF hub TRNLTTFMc1 were down 1.20 euros at 30.40 euros per megawatt-hour (MWh) in early trade on Monday, LSEG data showed.

Asia spot LNG prices LNG-AS fell to a seven-month low of $10.10 per million British thermal units (mmBtu) on Friday, supported by healthy storage levels in Europe and northeast Asia. LNG/

Oil prices edged lower on Monday as oil supplies remain unaffected, despite escalating tensions in the Middle East, after rising 2% last week on potential disruptions emanating from the conflict. O/R

In a speech, Britain’s Shapps said that even though other European nations did not join the strikes against the Houthis, some for constitutional reasons, they had widely congratulated London for its action. 

“The United Kingdom is one of those countries which has always traditionally, and continues to, step up to the plate when it is needed,” he said. 

More Oil Tankers Avoid The Red Sea

 At least six further oil tankers have either diverted their course away from or paused before entering the southern Red Sea since the weekend, ship tracking data from LSEG and Kpler show.

That takes the total number of shipping disruptions counted by Reuters to at least fifteen in total since the U.S.-led strikes on Houthi positions in Yemen last week.

The tankers Torm Innovation, Proteus Harvonne, and Alfios I appeared to have turned away from the Suez Canal and are taking the longer route around Africa’s Cape of Good Hope for voyages to Europe and the United States.

Pacific Julia and STI Topaz are also heading straight for the Cape Route.

And from the other side of the Suez Canal, the Octa Lune performed a U-turn in the northern part of the Red Sea on Jan. 12 and has returned to the Mediterranean with its Taiwan-bound naphtha cargo.

The tankers tracked by Reuters on Friday to have diverted or paused have either taken the longer Cape route or paused in the Gulf of Aden or the northern Red Sea.

(Reporting by Maha El Dahan in Davos, Emily Chow in Singapore, Andrew Mills in Doha, Sachin Ravikumar and Elizabeth Piper in London, Chandni Shah in Bengaluru,  Robert Harvey, Natalie Grover, Ahmad Ghaddar and Jonathan Saul; writing by Andrew Cawthorne; editing by Louise Heavens, Catherine Evans and Jason Neely, Reuters)

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up
Back to Main
polygon icon polygon icon

Why Join the gCaptain Club?

Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.

Sign Up
close

JOIN OUR CREW

Maritime and offshore news trusted by our 105,382 members delivered daily straight to your inbox.

gCaptain’s full coverage of the maritime shipping industry, including containerships, tankers, dry bulk, LNG, breakbulk and more.