Iranian-backed Houthi militants in Yemen have stepped up attacks on vessels in the Red Sea to show their support for Palestinian Islamist group Hamas fighting Israel in Gaza
London’s marine insurance market has widened the area in the Red Sea it deems as high risk amid a surge in attacks on commercial ships, according to a statement issued on Monday.
Iranian-backed Houthi militants in Yemen have stepped up attacks on vessels in the Red Sea to show their support for Palestinian Islamist group Hamas fighting Israel in Gaza.
The attacks, targeting a route that allows East-West trade, especially of oil, to use the Suez Canal to save the time and expense of circumnavigating Africa, have pushed some shipping companies to re-route vessels to avoid the area.
Guidance from the Joint War Committee, which comprises syndicate members from the Lloyd’s Market Association (LMA) and representatives from the London insurance company market, is watched closely and influences underwriters’ considerations over insurance premiums.
The joint war committee widened the high-risk zone to 18 degrees north from 15 degrees north previously, the statement said.
Below are companies (in alphabetical order) that are considering or have decided to pause shipping via the Red Sea:
French shipping group CMA CGM on Dec. 16 said it was pausing all container shipments through the Red Sea in the wake of attacks on commercial vessels in the region.
German container shipping line Hapag Lloyd said on Dec. 15 it was examining whether to pause sailings via the Red Sea, hours after reporting one of its ships had been attacked.
A projectile believed to be a drone struck its vessel Al Jasrah while sailing close to the coast of Yemen. No crew were injured.
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 from Salalah, Oman, to Jeddah, Saudi Arabia, the company said.
Mediterranean Shipping Company (MSC) said on Dec. 16 its ships would not 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 (OOCL) has stopped cargo acceptance to and from Israel until further notice due to operational issues, the shipping company owned by Hong Kong-based Oriental Overseas (International) Ltd. said on Dec. 16.
Meanwhile, oil and natural gas prices rose sharply on Monday after BP said it would pause all shipments through the Red Sea because of increased attacks on commercial vessels by Houthi militants in Yemen, a media report said.
The decision by one of the world’s biggest oil companies follows similar moves by major shipping firms, something analysts have warned could ripple through global supply chains and increase the costs of moving goods, CNN reported.
Oil posted steep gains on the news. Brent crude, the global benchmark, was up 2.7 per cent at $78.68 a barrel. US oil also rose 2.7 per cent to $73.38 a barrel.
The news also affected the natural gas market.
Europe’s benchmark natural gas prices surged more than 9 per cent to above €36 ($39.65) per megawatt hour. That’s still just a fraction of the all-time high of €320 ($349.24) per megawatt hour seen in August 2022, at the height of the continent’s energy crisis, but still the most concrete sign yet of disruption in commodity markets following the attacks.
Aerial attacks by the Iran-backed Houthis, who support the Hamas and the Palestinian people, have become more frequent since the outbreak of the Israel-Hamas war. The group has claimed the attacks as revenge against Israel.
The United States and its allies are now considering whether to expand an existing maritime taskforce in the Red Sea to protect commercial vessels, CNN reported.