Red Sea Tensions Redirect Tanker Routes

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  • The recent Houthi attacks in the Red Sea have prompted tankers to reroute, avoiding the affected area.
  • The death of three crew members in an attack on the bulk carrier True Confidence has intensified pressure on shipowners to divert vessels from the Red Sea.
  • Rerouting via the Cape of Good Hope adds approximately 7,500 km, or +70%, to the MEG-UKC route.
  • Clarkson Research Services (CRS) estimates a 1.5% increase in crude tonne-miles and a 4% increase in products tonne-miles due to this rerouting, though this is less significant than the demand surge resulting from the Russia-Ukraine conflict.

Asyad Shipping, part of the Asyad Group, has collaborated with Lloyd’s Register to release its first Environmental, Social, and Governance (ESG) report. Operating a fleet of 85 vessels, Asyad Shipping is among the first maritime organizations in the Middle East to publish an ESG report. The report focuses on the company’s efforts to become a green shipping company, making ESG a central element of its broader business strategy.

Surge in VLCC Orders Raises Concerns

Crude tanker newbuild contracting has experienced a significant surge, particularly in Very Large Crude Carriers (VLCCs). In the first two months of 2024, crude tanker newbuild contracting saw a year-on-year increase of 490%, totaling 7.4 million deadweight tons (dwt). Notably, 19 VLCCs were ordered, surpassing the total orders for this ship type in the entire year of 2023. Despite the high contracting rate, the orderbook to fleet ratio for VLCCs remained at 4% by February 2024, raising concerns about potential oversupply in the market.

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Source: Riviera