Oil tankers divert from Red Sea after US, UK strikes in Yemen

The Combined Maritime Forces warns all ships to avoid the Bab Al Mandab Strait at the south end of the Red Sea for several days

By Reuters

Published: Fri 12 Jan 2024, 8:46 PM

An increasing number of tanker owners steered clear of the Red Sea and multiple tankers changed course on Friday, shipping data showed, as US and British air strikes on Yemen overnight escalated an already highly volatile situation in the Red Sea.

The attacks were carried out from the air and sea in response to the Yemeni Houthi militia's attacks on ships in the Red Sea, a vital shipping lane for global trade.

The Combined Maritime Forces (CMF), a multinational maritime partnership led by the US from Bahrain, warned all ships to avoid the Bab Al Mandab Strait at the south end of the Red Sea for several days, tanker body INTERTANKO said in a statement.

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The Houthis have been targeting commercial vessels since late last year in attacks the group says aim to support the Palestinians against Israel's devastating offensive in the Hamas-ruled Gaza Strip. Those incidents have been concentrated on the Bab Al Mandab Strait, southwest of the Arabian Peninsula.

In a further sign of escalation, Iran on Thursday seized a tanker with Iraqi crude destined for Turkey. That incident took place closer to the Strait of Hormuz, between Oman and Iran, another important shipping corridor.

The tankers Toya, Diyyinah-I, Stolt Zulu and Navig8 Pride LHJ were all seen turning around mid-voyage in order to avoid the Red Sea between 0300 and 0730 GMT on Friday, according to ship tracking from LSEG and Kpler.

Five other oil tankers — Madarah Silver, Hafnia Thames, Free Spirit, Front Fusion and Gamsunoro — either made diversions or paused navigation on Friday.

Oil prices were up about 2 per cent by 1542 GMT, having risen even further earlier in the session with Brent crude trading above $80.

"The fear in the oil market is that the region is on an unpredictable escalating path where at some point down the road supply of oil will indeed in the end be lost," SEB analyst Bjarne Schieldrop said.

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Numerous shipping companies had in recent weeks opted to avoid the Red Sea region due to the heightened risks.

Despite some tanker diversions, supply chain disruptions had been mainly confined to the container shipping industry since the Houthis stepped up their maritime attacks in December. Oil tanker traffic through the Red Sea held steady last month.

Friday's diversions so far had impacted a smaller number of tankers relative to the December daily average of 76 tankers present in the southern Red Sea and Gulf of Aden, as counted by tracking service MariTrace.

The US and British strikes on Yemen, however, "could mark an inflection point as — at least for some days — the Bab Al Mandab Strait will become a war zone," said Alberto Ayuso Martin, head of research at Spain-based Medco Shipbrokers.

On Friday, Danish oil tanker group Torm said it decided to pause all transits through the southern Red Sea.

Shipping firms Hafnia and Stena Bulk also said they would avoid Bab Al Mandab.

Major container shipping companies Maersk and Hapag Lloyd welcomed measures to secure the region. But they stopped short of saying whether the US and British strikes would be enough for them to return to the Suez Canal, the fastest route between Asia and Europe which accounts for about 12 per cent of global container traffic.

Last month, Belgian oil tanker firm Euronav said it would avoid the Red Sea area until further notice. A company spokesperson said on Friday that policy has not changed.