Oil and fuel tanker traffic in the Red Sea was stable in December, even though many container ships have rerouted due to attacks by Iran-aligned Houthi militants, a Reuters analysis of vessel tracking data showed, says an article published on reuters website.
Summary
- Despite rerouting challenges for container ships due to Houthi attacks in the Red Sea, oil and fuel tanker traffic remained stable in December.
- The Houthi attacks, primarily aimed at non-petroleum goods shipments and vessels allegedly bound for Israel, have driven up costs for the shipping industry. However, the overall impact on oil flows has been less severe than anticipated.
- In December, an average of 76 tankers carrying oil and fuel navigated the south Red Sea and Gulf of Aden, a region close to Yemen witnessing attacks. This figure remained consistent with November averages.
- Chartering rates have doubled since December, reaching up to $85,000 a day for Suezmax tankers and $75,000 a day for Aframax vessels. Despite this surge, tankers’ daily movements have remained relatively stable.
Stability Amidst Turmoil
While container ships face rerouting challenges due to Houthi attacks in the Red Sea, oil and fuel tanker traffic has displayed surprising stability in December, as per Reuters’ vessel tracking data analysis. Despite heightened shipping costs and increased insurance premiums, oil flows remain largely unaffected, with the East-West passage continuing to be utilized by shippers.
Houthi Targets And Shipping Impact
The Houthi attacks, primarily aimed at non-petroleum goods shipments and vessels allegedly bound for Israel, have driven up costs for the shipping industry. However, the overall impact on oil flows has been less severe than anticipated. Shippers, including major companies like BP and Equinor, continue to use the Red Sea route, balancing increased costs against the affordability of the alternative route around Africa.
Tanker Traffic And Suez Canal Dynamics
In December, an average of 76 tankers carrying oil and fuel navigated the south Red Sea and Gulf of Aden, a region close to Yemen witnessing attacks. This figure remained consistent with November averages, reflecting the resilience of oil traffic. The decision to reroute from the Suez Canal to the Cape of Good Hope incurs additional costs, impacting the profitability of oil deliveries.
Shipping Costs Surge And Tanker Movements
Chartering rates have doubled since December, reaching up to $85,000 a day for Suezmax tankers and $75,000 a day for Aframax vessels. Despite this surge, tankers’ daily movements have remained relatively stable, only experiencing a brief dip between December 18 and December 22 during intensified Houthi attacks.
Container Ship Decline And Impact On Global Supply Chains
In contrast to oil tankers, container ship traffic in the area has seen a notable decline of 28% in December compared to November, with a sharper drop in the second half of the month coinciding with heightened attacks. This decline poses challenges to global supply chains, impacting the movement of non-petroleum goods.
Shippers Risk-Taking And Geopolitical Considerations
Despite increased costs and the threat of attacks, several oil majors, refiners, and trading houses continue to use the Red Sea route. Shippers prioritize avoiding schedule disruptions, indicating a willingness to take calculated risks. The analysis suggests that many oil tankers transiting the Red Sea are carrying Russian crude to India, a scenario that the Houthis may not target.
Shifting Flows And Global Impact
Some companies, such as BP and Equinor, have chosen to pause transits through the Red Sea and reroute vessels. At least 32 tankers have diverted or transited via the Cape of Good Hope since mid-December, with impacted entities primarily linked to the US and Israel. The ongoing uncertainty in the Red Sea has contributed to record crude exports to Europe, highlighting the geopolitical influence on global oil markets.
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Source: Reuters
