Up to 822 ships – around a third of global capacity – are potentially impacted by attacks in the Red Sea, according to Drewry Shipping Consultants research, says an article published on gas world website.
Summary
- The Red Sea crisis has potentially affected up to 822 ships, constituting around one-third of global capacity.
- Drewry Shipping Consultants emphasize the critical nature of the next four-to-five weeks for global shipping and traffic between Asia, Europe, and the Mediterranean.
- Ships rerouting from the Suez Canal around the Cape of Good Hope lead to a significant increase in sailing times, ranging from 10 to 14 days, and escalate fuel costs.
- The disruption coincides with the impending Chinese New Year (February 10-24), causing concerns about the stability of global supply chains.
- The ongoing Houthi attacks pose a threat to the Suez Canal, a vital passage for LNG shipments from the Middle East and the US to Asia, causing havoc in the LNG market.
Scope of Impact, A Third Of Global Shipping Fleet Affected
The Red Sea crisis reverberates across global shipping, with up to 822 ships, constituting around one-third of global capacity, potentially affected by recent attacks, as highlighted by Drewry Shipping Consultants. This revelation underscores the profound implications of the ongoing disruption for the maritime industry.
Critical Weeks Ahead, Warning For Global Shipping
Drewry emphasizes the critical nature of the next four-to-five weeks, labeling it a pivotal period for global shipping and traffic between Asia, Europe, and the Mediterranean. The situation prompts heightened vigilance and strategic planning among industry stakeholders.
Extended Sailing Times And Elevated Costs
Ships rerouting from the Suez Canal around the Cape of Good Hope lead to a significant increase in sailing times, ranging from 10 to 14 days. This diversion not only disrupts schedules but also escalates fuel costs, posing challenges for operators and shippers worldwide.
Chinese New Year Dilemma, Navigating Supply Chain Challenges
The disruption arrives as a major headache for operators and shippers, coinciding with the impending Chinese New Year (February 10-24). Drewry notes a palpable sense of panic in China regarding capacity availability, heightening concerns about the stability of global supply chains.
LNG Market Turmoil, Shifting Dynamics And Potential Havoc
Drewry sheds light on the impact on the LNG market, with the Suez Canal being a vital passage for LNG shipments from the Middle East and the US to Asia. The ongoing Houthi attacks pose a threat to this preferred route, causing havoc in the LNG market and raising concerns about potential disruptions to shipments.
Suez Canal Vs. Panama Canal, LNG Transit Dynamics
The significance of the Suez Canal in LNG transit becomes evident, recording 50% of LNG carrier transits from January to November 2023. The canal’s importance for Qatar, responsible for a substantial portion of European gas supplies, amplifies the impact of current diversions, leading to a spike in gas prices.
Short-Term Resilience But Long-Term Concerns
While high storage in Europe and subdued demand from Asia may provide short-term insulation, Drewry warns of potential significant impacts if the situation escalates. The Panama Canal’s increased daily transits offer mild relief but underscore the prevailing challenges in global shipping routes.
Longer Diversions And Impact on Rates
Continued attacks in the Red Sea could lead to prolonged diversions, generating extra tonne-mile demand. Notably, re-routing Qatari shipments from the Suez Canal to the Cape of Good Hope could significantly increase sailing times and trigger a rise in LNG carrier rates, coupled with heightened war risk premiums. The evolving situation demands a nuanced response from the maritime industry to navigate the complex challenges ahead.
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Source: gas world
