International shipping in the Red Sea and vital Bab al-Mandab Strait is grinding to a halt with tankers, container ships, and other types of commercial vessels rerouting around the Cape of Good Hope to avoid missile and drone attacks from Yemen’s Iran-backed Houthis.
In a report that has become almost daily this week, Bloomberg states that the United Kingdom Maritime Trade Operations is monitoring a new potential incident involving a commercial vessel. This latest incident is said to have occurred around 80 nautical miles northeast of Djibouti.
On Monday, Houthi rebels attacked two commercial ships in the Red Sea. Full details of the attacks were not immediately known, but spurred a handful of major shipping companies to halt transit through the Red Sea.
At least seven major shipping companies, including Taiwanese container shipping line Evergreen, Belgian tanker owner Euronav, energy giant BP Plc, Maersk, Hapag-Lloyd, CMA CGM, and Mediterranean Shipping Company have paused all commercial vessel operations through the Red Sea that connects to Egypt’s Suez Canal.
Spillover risks of the Israel-Hamas war are quickly building, as the Red Sea is responsible for 10% to 12% of the world’s international trade. These mounting risks have forced London maritime insurers to demand war risk coverage for vessels that want to transit the Red Sea.
Red Sea is now largely closed to traffic. That’s 8.8 million bpd of daily oil transit, and nearly 380 million tons of daily cargo transit.
Global traffic now will be rerouted around Cape of Good Hope, adding 40% to voyage distance (and even more to cost) pic.twitter.com/Xct7x03tFI
— zerohedge (@zerohedge) December 18, 2023
On Monday, US Secretary of Defense Lloyd J. Austin said the US and allies, including the UK, Canada, France, and others, are creating a new naval task force to protect critical maritime shipping lanes.
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