The conflict in the Middle East is now intensifying, and now Yemen's Houthis have joined the attacks on Israel on the grounds of "supporting Palestine", launching frequent missile and drone attacks on Israel, and successively attacking "Israeli-associated" ships in the Red Sea. Tensions in the Red Sea waters mean that the risk of spillover from the Palestinian-Israeli conflict has increased, which has spread to international shipping, and the global ** chain has been tightened.
Affected by this, BP announced that it would suspend all tankers crossing the region, while European natural gas** also recorded the largest increase in two months, and the European benchmark - Dutch natural gas **settlement price**7%, the largest increase since October 12, and its **intraday**13%. Previously, on December 18, the New York Stock Exchange was lightweight***also**146%, London Brent*** for February 2024 delivery**183%。
Oil prices are likely to climb further
Yemen's Houthi rebels are targeting the passage of the Bab el-Mandeb Strait (aka"The Gate of Tears"Vessels. The Bab el-Mandeb Strait is a 32-kilometre-wide strait connecting the Red Sea to the Gulf of Aden, between Yemen at the southern end of the Red Sea and Djibouti and Eritrea, and is a necessary route for ships to reach the Suez Canal from the south, which is itself an important shipping lane. Due to tensions in the Strait, ships will now have to take a detour around the Cape of Good Hope in Africa, which will add about 10 days to the voyage, and the increase in freight costs will be immeasurable.
In the latest news, oil giant BP said it would suspend all oil shipments through the Red Sea. Analysts point out that if other big oil companies follow suit, oil prices could **.
NEW YORK, Dec. 18 (Xinhua) -- As of that day, the New York Mercantile Exchange (COMETO) for January 2024 delivery of lightweight ***104 US dollars, closed at 72 per barrel$47, an increase of 146%；London Brent for delivery in February 2024***1$40, closed at $77 per barrel$95, an increase of 183%。
Gregory Blue, an oil historian and analyst at the Eurasia Group, said it was unclear how big the impact would be. However, if more shipping companies divert routes, if such attacks and disruptions last more than a week or two, oil** will climb further.
Shipping resources are in short supply
The Red Sea is one of the world's most important routes for the transportation of oil, liquefied gas and consumer goods.
According to Freightos, since the outbreak of the new Palestinian-Israeli conflict, the Asia-US East Coast** has climbed by 5%, reaching about $2,497 per container**, according to the United States**. As companies avoid the Suez Canal, which leads to the Red Sea, they choose to make a detour to Africa to the Indian Ocean. As a result, the shipping route is increased by 14 days and the cost of fuel is also increasing. With longer times to reach destinations, this workaround can lead to "vessel capacity constraints" and inevitable delays in container and commodity shipments.
Michael Aldwell, executive vice president of maritime logistics at Decusion, saidContainer shipping now accounts for nearly one-third of the world's total shipping, and the value of transported goods has reached $1 trillion.
Michael Aldwell saidAbout 19,000 ships pass through the Suez Canal every year. "Longer sailing times on the water will require an increase of about 20% of global capacity, resulting in a shortage of shipping resources**. He added that the time for empty containers to return to Asia will also continue to be extended, which will exacerbate the dilemma of the global ** chain.
The change in routes will also hurt Egypt's already precarious economy. Egypt currently owns, operates and maintains sovereignty over the Suez Canal. The Suez Canal Authority said it generated a record $9.4 billion in revenue in the 2022-23 fiscal year. In addition, the conflict in the Middle East has taken a toll on Egypt's tourism industry.
Escape the Red Sea
A series of attacks made the businessman shiver. Frontline, owned by the Norwegian ship king, has said it will avoid the Red Sea, and Maersk, the world's second-largest shipping company, recently said that the Maersk Gibraltar was almost wrecked and another container ship was also attacked, making the situation look "alarming".
Mediterranean Shipping Company, one of the world's largest shipping groups, has said it will gradually bypass the region. The company's container ship, which was also attacked as it crossed the Red Sea on Friday, has ceased operations.
Germany's Hapag-Lloyd said it was rerouting its vessels, passing through the Cape of Good Hope, until "safety of ships and crews is restored" through the Red Sea.
Peter Sander, chief analyst at Xeneta, an Oslo-based freight data company, said shipping companies were reaching out to customers to let them know that shipments would be delayed. He said the shipping industry will also face knock-on effects such as insurance premiums, but he said the industry is now much more resilient to the crisis than it was in 2021, when the giant ship Evergiven blocked the Suez Canal.