London
\nBP said Monday that it would pause all shipments through the Red Sea because of increased attacks on vessels by Houthi militants in Yemen.
\n\u201cIn light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea,\u201d the company said in a statement. \u201cWe will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.\u201d
\nOil rose sharply on the news. Brent crude, the global benchmark, was up 1.1% to $77 a barrel. US oil rose 1% to $72 a barrel.
\nThe news disrupted the entire energy market: Futures prices for Europe\u2019s benchmark natural gas contract surged nearly 8%, before paring gains to trade 5.5% higher by early afternoon Monday, at \u20ac35 ($38.20) per megawatt hour. That\u2019s still well below the all-time high of \u20ac320 ($349.24) per megawatt hour seen in August 2022, at the height of the continent\u2019s energy crisis, but a clear sign of disruption to energy prices following the attacks.
\nAerial attacks by the Iran-backed Houthis, who support Hamas, have become more frequent since the outbreak of the Israel-Hamas war. The United States and its allies are now considering whether to expand an existing maritime taskforce in the Red Sea to protect commercial vessels.
\nThe world\u2019s biggest container shipping companies have also paused transit through one of the world\u2019s vital trade arteries in a move that experts say could snarl supply chains and drive up freight costs.
\nMSC, Maersk, CMA CGM and Hapag-Lloyd all said in recent days that they would avoid the Suez Canal over safety concerns. Evergreen Group\u2019s container shipping arm joined that list Monday, saying in a statement that it would suspend its Israel import and export service \u201cwith immediate effect until further notice.\u201d
\nOn Friday, Houthi rebels claimed responsibility for attacks on two MSC vessels.
\n\u201cThe situation is further deteriorating and concern of safety is increasing,\u201d French group CMA CGM said in a statement Saturday as it announced that ships due to pass through the Red Sea had been instructed to pause their journeys \u201cuntil further notice.\u201d
\n\u201cCMA CGM is taking all necessary steps to preserve its transportation services for its customers,\u201d the company added.
\nBut analysts have cautioned that the disruption to a key trade route between East and West could have knock-on effects on supply chains.
\n\u201cGlobal freight can expect to see rate increases, rerouting and longer transit times,\u201d said Judah Levine, head of research at logistics company Freightos.
\nAlready, some ships are being rerouted via the Cape of Good Hope in Africa, adding up to three weeks to journey times.
\n\u201cThis means that one week of meaningful capacity rerouting could have ripple effects for several months ahead, after a lag of a few weeks,\u201d UBS analysts wrote in a note Sunday, highlighting that around 30% of global container trade passes through the Suez Canal.
\nThe analysts said that, if the disruptions persisted, shippers might be able to \u201clock in higher-than-expected rates\u201d as they renegotiate long-term contacts in the coming days and weeks.<\/p>\n","protected":false},"excerpt":{"rendered":"
London BP said Monday that it would pause all shipments through the Red Sea because of increased attacks on vessels by Houthi militants in Yemen. \u201cIn light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea,\u201d the company said in a […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-375348","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-world"},"yoast_head":"\n