Energy
Monday, January 15th, 2024 4:21 pm EDT
Key Points
- Major tanker companies, including Hafnia, Torm, and Stena Bulk, have suspended traffic to the Red Sea in response to U.S. and British airstrikes on Iran-aligned Houthi militants in Yemen.
- The Combined Maritime Forces, led by the U.S., issued an advisory, leading to the halt in traffic, and the International Association of Independent Tanker Owners recommended ships avoid the Bab el-Mandeb Strait for several days.
- The geopolitical tensions and potential disruptions to vital oil routes, like the Strait of Hormuz, raise concerns about oil prices, with Goldman Sachs noting the possibility of prices doubling in case of a prolonged Strait of Hormuz disruption.
Several major tanker companies, including Hafnia, Torm, and Stena Bulk, have halted traffic toward the Red Sea following U.S. and British airstrikes on Iran-backed Houthi militants in Yemen. The Combined Maritime Forces, a U.S.-led multinational coalition, issued an advisory, prompting the tanker operators to suspend movements in the affected area. The Bab el-Mandeb Strait, connecting the Gulf of Aden with the Red Sea, is a critical trade gateway, with around 7 million barrels of crude oil and products transiting daily. Trade analytics firm Kpler reported a spike in oil prices, with West Texas Intermediate futures rising over 4% to $75.25. The International Association of Independent Tanker Owners recommended ships avoid the strait for several days. The situation is dynamic, and vessels are advised to stay clear while assessing the situation. The Houthis, allied with Iran, have vowed to respond to the airstrikes, and the U.S. and British forces targeted them in response to attacks on international maritime vessels in the Red Sea. The geopolitical tensions in the region raise concerns about potential disruptions to vital oil routes, like the Strait of Hormuz, which sees approximately 18 million barrels of crude and products transit daily. Goldman Sachs has noted the possibility of oil prices doubling in the event of a prolonged Strait of Hormuz disruption. The situation is further complicated by the risk of escalation in Lebanon, where Israel has threatened action against Iran-backed Hezbollah near the border, potentially impacting oil leverage and prices.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/12/tanker-companies-temporarily-halt-traffic-toward-red-sea-after-us-airstrikes-on-houthis.html
