Red Sea trade disruption hits energy sector after strikes on Houthis

Qatar suspended liquefied natural gas (LNG) shipments via the Red Sea and six more oil tankers changed direction on Monday as disruption to the crucial trade route extended to the energy sector after US-led strikes against Houthi militants.

Attacks on ships since October by Yemen’s Houthis, who say they are acting in solidarity with Palestinians, have hit commerce and alarmed major powers in a regional escalation of Israel’s more than three-month war with Hamas militants in Gaza.

In the latest possible attack, Britain said on Monday that a vessel was hit from above by a missile 95 nautical miles southeast of Yemen’s port of Aden.

In response to the instability, the world’s second largest LNG exporter QatarEnergy has now held back at least four gas tankers from the Red Sea, a senior source said.

At least six more oil tankers were also steering clear on Monday, making 15 since last week’s Western strikes in Yemen, according to tracking data. Prior to that, it was mostly container ships avoiding the area in fallout from the Gaza war.

The Houthis have been at war with a Saudi-led coalition in Yemen for years, but turned their sights on the sea as a way to put pressure on Israel after the Gaza war began.

In the latest Western military action in the region, the United States said late on Sunday that its fighter aircraft shot down an anti-ship cruise missile fired by the militants toward a US destroyer. No injuries or damage were reported, it said on X.

Supplies affected

With some supply lines affected by the instability, carmaker Suzuki said production would be halted at its Esztergom plant in Hungary from January 15-21 as the Red Sea attacks had delayed the arrival of Japanese-made engines.

The Houthis have vowed to keep targeting Israel-linked ships and to give a firm response to the attacks on them.

US ally Britain said it had no desire to be involved in Red Sea conflict but was committed to protecting free navigation. “Let’s wait and see what happens,” Defence Secretary Grant Shapps told Sky News regarding potential further strikes.

China, too, is worried about the implications for its major commercial interests along the Suez Canal.

Oil prices lost more than 1 per cent on Monday as the Middle East conflict’s limited impact on crude output prompted profit taking after oil benchmarks gained 2 per cent last week.