BP suspends Red Sea oil shipments as attacks increase
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The news: BP has become the first oil producer to pause shipments through the Red Sea as attacks on merchant vessels by rebel groups increase.
The numbers: Oil prices rose on Monday, with Brent and West Texas Intermediate crude climbing almost 3%, to USD73.49 and USD78.68 respectively.
The context: Attacks on military and merchant vessels in the Red Sea have been on the rise since the Israel-Hamas war broke out in early October. Iran-backed Houthi Rebel groups based in Yemen have increased drone and missile attacks over the last week, prompting shipping companies including CMA CGA, Equinor, Evergreen, Hapag-Lloyd, Maersk, Orient Overseas and ZIM to suspend their shipping activity in the region.
The Suez Canal is located at the north end of the Red Sea, making the route an essential shipping link between Asia and Europe. Ships which do not wish to travel through the Red Sea will be forced to travel south around the Cape of Good Hope, severely impacting costs and extending shipping times.
What they said: As reported by Politico, BP’s statement on Monday said: “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 […] We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”
The source: Politico
