The ongoing attacks on commercial vessels in the Red Sea by the Iranian-backed Houthi rebels in Yemen have caused some of the top shipping and oil companies to reroute global trade away from the crucial shipping artery, which will likely trigger an increase in prices and shipping delays, the Associated Press reported.
British Petroleum announced on December 18 that it was temporarily pausing its transports through the Red Sea, including shipments of oil, natural gas, and other energy supplies, as a precautionary measure.
The oil and gas giant said it would continue to review the ongoing situation but would make crew safety its priority.
Prices for oil and natural gas rose in Europe last week partly due to nervous investors concerned about the missile and drone attacks on commercial shipping in the Red Sea.
The Iranian-backed Houthis have been targeting oil tankers and container ships that pass through the narrow waterway separating Yemen from East Africa that leads north to the Red Sea and Suez Canal. An estimated 10 percent of the world’s trade passes through this artery.
The International Chamber of Shipping’s John Stawpert told the Associated Press that the attacks pose a significant problem for both Europe and Asia as 40 percent of all trade between the two regions passes through the waterway.
Container vessels managed by CMA CGM Group, Hapag-Lloyd, MSC, and Maersk move the bulk of the consumer goods between Europe and Asia, and “virtually all” of the ships will have to be rerouted, according to Simon Heany of the maritime research consultant group Drewry.
Heany told the Associated Press that the vessels will have to travel around the Cape of Good Hope at the southern tip of Africa which will add between a week to ten days to each voyage. The longer journey will also lead to increased costs as the shipments will require longer transit times, more fuel, and more vessels.