Oil and fuel tanker traffic in the Red Sea was stable in December, even though many container ships have rerouted due to attacks by Iran-aligned Houthi militants, . The attacks have driven up shipping costs sharply along with insurance premiums, but have had less impact than feared on oil flows, with shippers continuing to use the key East-West passage. The Houthis, who have said they are targeting Israel-bound vessels, have largely attacked non-petroleum goods shipments. The added costs have not made a big difference to most shippers so far because the Red Sea remains much more affordable than sending cargo around Africa. But the situation bears watching with some oil companies like BP and Equinor diverting cargoes to the longer route. Also, increased shipping costs are likely to boost exports of U.S. crude to some European buyers, experts said.
“We haven’t really seen the interruption to tanker traffic that everyone was expecting,” said Michelle Wiese Bockmann, a shipping analyst at Lloyd’s List. A daily average of 76 tankers carrying oil and fuel were in the south Red Sea and Gulf of Aden in December, the area close to Yemen that has seen attacks. That was only two fewer than November’s average and just three below the average for the first 11 moisource: Reuters analysis of vessel tracking data
Rival tracking service Kpler tracked 236 ships on average daily across all of Red Sea and Gulf of Aden in December, slightly above the 230 daily average in November.
Since the beginning of December, chartering rates have roughly doubled according to data from ship analytics firm Marhelm. It cost as much as $85,000 a day to ship oil on Suezmax tankers, which can carry as much as 1 million barrels. Aframax vessels, which can move 750,000 barrels, cost $75,000 a day.
Container ship traffic in the area has fallen more sharply, down 28% in December from November, with steep declines in the second half of the month as attacks mounted, according to MariTrace.
Several oil majors, refiners, and trading houses have continued to use the Red Sea route, according to an analysis of LSEG data. “Shippers and their customers really want to avoid a schedule disruption. So they are still taking the risk,” said Calvin Froedge, founder of Marhelm. He noted that many oil tankers transiting the Red Sea were carrying Russian crude to India, which the Houthis have no interest in attacking.
Some companies such as BP and Equinor have paused all transits through the Red Sea and rerouted their vessels in the region.
“Ongoing uncertainty in the Red Sea is likely spurring on some modicum of European buying (of US crude),” Smith said.