Fears of Houthi attacks are rerouting commercial ships away from the Red Sea

Global trade rerouted away from Red Sea due to Houthi attacks, causing delays & rising prices.

The attacks on commercial vessels in the Red Sea by Yemen's Houthi rebels have scared off some of the world's top shipping companies and oil giants, effectively rerouting global trade away from a crucial artery for consumer goods and energy supplies that is expected to trigger delays and rising prices.

BP said Monday that it has “decided to temporarily pause all transits through the Red Sea,” including shipments of oil, liquid natural gas and other energy supplies. Describing it as a “precautionary pause," the London-based oil and gas corporation said the decision faces ongoing review but crew safety was the priority.

Both oil and European natural gas prices rose partly over market nerves about attacks by the Iranian-backed Houthis, who confirmed two new attacks Monday. It is the latest targeting of container ships and oil tankers passing through a narrow waterway that separates Yemen from East Africa and leads north to the Red Sea and Suez Canal, through which an estimated 10% of the world’s trade passes.

Besides critical energy supplies reaching Europe and beyond on tankers moving through the area, food products like palm oil and grain and most of the world’s manufactured products are transported by container ships, with many heading through the Suez Canal.

Almost all goods that stores needed for Christmas will have already been delivered, but online orders could be delayed, analysts say, because four of the world’s five largest container shipping companies have paused or rerouted movements through the Red Sea in the last several days.

MSC, Maersk, CMA CGM Group and Hapag-Lloyd are leaders in alliances that move basically all consumer goods between Asia and Europe, so “virtually all services will have to make this rerouting,” said Simon Heaney, senior manager of container research for Drewry, a maritime research consultancy.