Major Oil and Shipping Companies Suspend Travel Through Key Waterway

Multiple oil and shipping companies said they will avoid the Red Sea amid attacks, sending oil prices much higher on Monday.
Major Oil and Shipping Companies Suspend Travel Through Key Waterway
Containers are stacked up on the container ship MSC Maria Elena at the port of Antwerp, Belgium, on Sept. 23, 2022. Yves Herman/Reuters
Jack Phillips
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A number of large shipping companies and oil firms have said they are suspending transit through the Red Sea to avoid attacks on vessels by Yemen’s Houthi rebels amid the Israel–Hamas war. Oil prices rose sharply on the news.

Brent crude, the global benchmark, was up about 2 percent at $78.15 a barrel by 1:45 a.m. New York time on Dec. 18. U.S. oil also rose by about 2.4 percent, to about $73.47 a barrel.

Norwegian oil and gas firm Equinor on Dec. 18 said it had rerouted some vessels that had been headed toward the Red Sea, and Belgian oil tanker firm Euronav said on Dec. 18 it would avoid that area until further notice.

French shipping group CMA CGM announced on Dec. 16 that it was pausing all container shipments through the Red Sea.

Most significantly, oil giant BP said on Dec. 18 that it had temporarily paused all transits through the key waterway.

“In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea,” BP said in a statement. “We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”

Denmark’s A.P. Moller-Maersk on Dec. 15 said it would pause all container shipments through the Red Sea until further notice, following a “near-miss incident” involving its vessel Maersk Gibraltar a day earlier. The ship was targeted by a missile while traveling to Jeddah, Saudi Arabia, from Salalah, Oman, the company confirmed.

German container shipping line Hapag Lloyd said on Dec. 18 that it would reroute several ships via the Cape of Good Hope until the safety of passage through the Suez Canal and the Red Sea could be guaranteed.

Mediterranean Shipping Co. (MSC) said on Dec. 16 that its ships wouldn’t transit through the Suez Canal, with some already rerouted via the Cape of Good Hope, a day after Houthi forces fired two ballistic missiles at its MSC Palatium III vessel. The decision will disrupt sailing schedules by several days, the Switzerland-based group said.

Orient Overseas Container Line has stopped cargo acceptance to and from Israel until further notice, the shipping company owned by Hong Kong-based Oriental Overseas said in a statement. Taiwan’s Yang Ming Marine Transport said it would divert ships sailing through the Red Sea and the Gulf of Aden via the Cape of Good Hope for the next two weeks.

“This means that one week of meaningful capacity rerouting could have ripple effects for several months ahead, after a lag of a few weeks,” UBS analysts wrote in a note on Dec. 17.

Drones Shot Down

The USS Carney, a U.S. Navy destroyer, responded on Dec. 18 to a distress call from a commercial ship that was attacked in the Red Sea. “Multiple projectiles” were fired at the Swan Atlantic merchant vessel, an official said, adding that it isn’t clear what kind of projectiles were fired.

The Houthis, a group that was designated as a terrorist organization until 2021, when the State Department removed the designation, claimed responsibility for attacks on two MSC vessels last week.

Ali al-Qahoum, a member of the Iran-backed Houthi Ansarullah group, told a Lebanese media outlet that Yemen and the Houthis, who control much of Yemen, have their defensive options readied to respond to any moves that the United States, Israel, or other country might make in the near future.

“The Houthis will not abandon the Palestinian cause, regardless of any U.S., Israeli, or Western threats,” Mr. al-Qahoum said over the weekend, noting that the group’s operations against Israel will continue.

The USS Carney on Dec. 16 intercepted 14 drones launched by the Houthis in Yemen over the weekend, according to officials. Those drones were “shot down with no damage to ships in the area or reported injuries,” the U.S. Central Command said in a statement on social media.

“Regional Red Sea partners were alerted to the threat,” the U.S. military stated.

Earlier in December, the USS Carney shot down at least three Houthi drones that were heading in the ship’s direction. In November, the USS Thomas Hudner shot down drones that were launched from Yemen, a country that was the site of a civil war that began after longtime former leader Ali Abdullah Saleh stepped down in 2012—he was assassinated in 2017.

The U.S. Navy guided-missile destroyer USS Carney transits the Suez Canal on Oct. 18, 2023. (Mass Communication Specialist 2nd Class Aaron Lau/U.S. Navy via Reuters)
The U.S. Navy guided-missile destroyer USS Carney transits the Suez Canal on Oct. 18, 2023. Mass Communication Specialist 2nd Class Aaron Lau/U.S. Navy via Reuters

The U.S. military has also carried out strikes targeting ammunition storage facilities and weapons depots that were being used by Iranian or Iran-backed forces in eastern Syria and Iraq.

“While the Houthis are pulling the trigger, so to speak, they’re being handed the gun by Iran,” U.S. national security adviser Jake Sullivan told journalists while in Israel on Dec. 14.

Reuters contributed to this report.
Jack Phillips
Jack Phillips
Breaking News Reporter
Jack Phillips is a breaking news reporter who covers a range of topics, including politics, U.S., and health news. A father of two, Jack grew up in California's Central Valley. Follow him on X: https://twitter.com/jackphillips5
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