Home News Oil prices rose due to Houthi attacks on ships in the Red Sea

Oil prices rose due to Houthi attacks on ships in the Red Sea

by Afonso
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International oil prices have risen as attacks by Yemen’s Houthi rebels on ships in the Red Sea have disrupted maritime trade and forced companies to reroute ships. Maersk, the world’s second-largest shipping company, said it would operate some of its vessels around the Uttamasha Antrip (Cape of Good Hope).

The Red Sea is one of the world’s most important waterways for the transportation of oil and liquid gas. Apart from this, a large amount of consumer goods are also transported on this route. Iran-backed Houthi attacks on cargo ships in the Red Sea since the start of the Israel-Hamas conflict last October have already affected global trade. 12 major companies and oil transport companies have suspended their services through the Red Sea. These companies represent about 60 percent of global trade. As a result, the supply of products and fuel oil is being interrupted.

According to a Reuters report, 12 companies have canceled or will cancel all scheduled voyages through the Red Sea for the safety of sailors and ships. These companies are BP, MSC, Maersk, Hapag Lloyd, CMA CGM, Yang Ming Marine Transport, Equinor, Euronav, Frontline, HMM, OOCL and Evergreen.

Evergreen said it would temporarily stop transporting any cargo to Israel. The company also said it will suspend shipping services to Israel. Chinese-owned Cosco Shipping Group’s Orient Overseas Container Line (OOCL) said it had suspended Israeli cargo shipments due to the problem.

Yoni Esakov, a member of the Israeli Chamber of Shipping’s executive committee, said about 30 percent of Israeli imports come in container ships through the Red Sea. These are booked two-three months in advance for consumables or other products. Now if the ships change the route, it will be difficult to import the goods from that region.

UK-based oil company BP said in a statement, ‘The safety of our people and those who work for us comes first. Considering the security situation, BP has decided to temporarily stop all transit through the Red Sea.’

According to online shipping marketplace Freights, the cost of transporting goods by sea has already gone up. After the start of the Israel-Hamas war, Asia-US East Coast (cargo service) prices rose 5 percent to $2,497 per 40-foot container. It can be more expensive. Because big companies are avoiding the Suez Canal. Africa has to be traversed to reach the Indian Ocean. Additional time up to 14 days has to be added to travel this route. At the same time, high fuel consumption has to be added. As a result, ships take much longer to reach their destinations.


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