Saudi halts Red Sea shipment

The chairman of Kuwait Oil Tanker Company said the country was studying whether to follow suit.

Oil prices rose to a 10-day high on Thursday after Saudi Arabia said it was suspending oil shipments through a strategic Red Sea lane after Yemen's Iran-aligned Houthi rebels attacked two tankers in the waterway, underscoring the risk of an escalation in tensions in the region.
Futures for Brent crude, the international oil benchmark, hit $74.83 per barrel before falling back in later in the day trading to $73.99, up six cents.
The Houthis, who have previously threatened to block the Bab Al Mandeb Strait, said they had the naval capability to hit Saudi ports and other Red Sea targets. Iran has threatened to block another strategic shipping route, the Strait of Hormuz.
Saudi Energy Minister Khalid Al Falih said the Houthis attacked two Saudi oil tankers in the Red Sea on Wednesday, one of which sustained minimal damage.
"Saudi Arabia is temporarily halting all oil shipments through Bab Al Mandeb strait immediately until the situation becomes clearer and the maritime transit through Bab Al Mandeb is safe," he said.
The chairman of Kuwait Oil Tanker Company said the country was studying whether to follow suit.
Falih's statement said the two Very Large Crude Carriers (VLCCs) attacked were operated by Saudi shipping company Bahri, which identified the damaged vessel as the Arsan.
"The two million barrels capacity for each tanker were full of crude oil cargo at the time and were headed for export. One of the VLCCs sustained minimal damage," Falih said.
The powerful commander of Iran's Revolutionary Guards Quds force, Qassem Soleimani, criticised the US role in the world's top oil exporting region.
"The Red Sea, which was secure, is no longer secure with the American presence ...(US President Donald) Trump should know that we are nation of martyrdom and that we await him," Soleimani was quoted as saying on Thursday.
Industry and shipping sources said the suspension was unlikely to impact Saudi crude supplies to Asia, but could add shipping costs to Saudi vessels heading to Europe and the US due to a longer transit.
The Bab Al Mandeb Strait, off the coast of Yemen, Djibouti, and Eritrea, connects the Red Sea with the Arabian Sea and is one of the world's key chokepoints for shipping crude oil and other petroleum products. The strait is key for crude exports into the European market via either the Sumed pipeline that links the Red Sea with the Mediterranean through Egypt or the Suez Canal.
Saudi Arabia can bypass the Bab Al Mandeb Strait by moving oil across the country by pipeline and then loading it on to tankers at the Red Sea port of Yanbu, though at reduced output.
UAE Minister of State for Foreign Affairs Anwar Gargash said on Twitter the attack showed the need to take back the key port of Hodeida.
"The targeted attack on the Saudi oil tankers in the Red Sea confirms the necessity to liberate Hodeida from Houthi militias," said Gargash, whose country is part of the Saudi-led coalition.
"This systematic attack is a terrorist act which shows the nature and aggression of the Houthis."