![](https://investorshub.advfn.com/uicon/537553.png?cb=1686853752)
Monday, December 18, 2023 11:01:55 AM
Oil and gas prices surge as BP stops Red Sea shipments following Houthi attacks
By Hanna Ziady, CNN
3 minute read
Updated 9:54 AM EST, Mon December 18, 2023
Armed men stand on the beach as the Galaxy Leader commercial ship, seized by Yemen's Houthis last month, is anchored off the coast of al-Salif, Yemen, December 5, 2023.
Armed men stand on the beach as the Galaxy Leader commercial ship, seized by Yemen's Houthis last month, is anchored off the coast of al-Salif, Yemen, December 5, 2023.
Oil and natural gas prices rose sharply Monday after BP (BP) said it would pause all shipments through the Red Sea because of increased attacks on commercial vessels by Houthi militants in Yemen.
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.
“In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea,” the company said in a statement. “We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”
Oil posted steep gains on the news. Brent crude, the global benchmark, was up 2.7% at $78.68 a barrel by 9.30 a.m. ET. US oil also rose 2.7% to $73.38 a barrel.
The news also affected the natural gas market. Europe’s benchmark natural gas prices surged more than 9% 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 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.
Shipping companies pause Red Sea transit
The world’s biggest container shipping companies have also paused transit through one of the world’s vital trade arteries in a move that experts say could snarl supply chains and drive up freight costs.
MSC, Maersk, CMA CGM and Hapag-Lloyd all said in recent days that they would avoid the Suez Canal over safety concerns. Evergreen Group’s container shipping arm joined that list Monday, saying in a statement that it would suspend its Israel import and export service “with immediate effect until further notice.”
On Friday, Houthi rebels claimed responsibility for attacks on two MSC vessels.
“The situation is further deteriorating and concern of safety is increasing,” French group CMA CGM said in a statement Saturday as it announced that ships due to pass through the Red Sea had been instructed to pause their journeys “until further notice.”
“CMA CGM is taking all necessary steps to preserve its transportation services for its customers,” the company added.
But analysts have cautioned that the disruption to a key trade route between East and West could have knock-on effects on supply chains.
“Global freight can expect to see rate increases, rerouting and longer transit times,” said Judah Levine, head of research at logistics company Freightos.
Already, some ships are being rerouted via the Cape of Good Hope in Africa, adding up to three weeks to journey times and increasing fuel costs.
“This means that one week of meaningful capacity rerouting could have ripple effects for several months ahead, after a lag of a few weeks,” UBS analysts wrote in a note Sunday, highlighting that around 30% of global container trade passes through the Suez Canal.
The analysts said that, if the disruptions persisted, shippers might be able to “lock in higher-than-expected rates” as they renegotiate long-term contacts in the coming days and weeks.
This story has been updated with additional context and developments
Recent DJT News
- TMTG Secures Perpetual Licensing for New Technology in Truth Social TV Streaming and Signs Long-Term Equity Deal • GlobeNewswire Inc. • 07/03/2024 08:45:00 PM
- Apple Joins OpenAI Board, Logitech President Opts Out of Reelection, and More News • IH Market News • 07/03/2024 10:59:39 AM
- Trump Media Announces Over $105 Million in Cumulative Proceeds from Warrant Exercise and Over $350 Million in Cash on its Balance Sheet • GlobeNewswire Inc. • 07/02/2024 01:00:00 PM
- Trump Media & Technology Group Corp. Joins Russell 1000 and Russell 3000 Indexes • GlobeNewswire Inc. • 07/01/2024 01:28:31 PM
- Interactive Brokers Loses $48 Million on NYSE, Amazon Achieves Historic Market Value, and More News • IH Market News • 06/27/2024 11:13:41 AM
- SolarEdge Stock Falls 13%, Wegovy Approved in China, Grail Nasdaq Debut, Apple Rejects Meta Chatbot • IH Market News • 06/25/2024 10:36:11 AM
- UPS Divests Coyote Logistics in $1.025 Billion Deal with RXO, Under Armour Agrees to $434 million Settlement, and More News • IH Market News • 06/24/2024 11:00:20 AM
- Trump Media Announces $69.4 Million in Initial Proceeds from Warrant Exercise • GlobeNewswire Inc. • 06/21/2024 09:20:00 PM
- Honeywell Acquires CAES Systems for $1.9 Billion, Sarepta Therapeutics Surges 34%, Gilead Continues Gains • IH Market News • 06/21/2024 12:00:38 PM
- Trump Media Resells Stocks and Warrants; KB Home Exceeds Q2 Expectations, and More News • IH Market News • 06/20/2024 10:55:11 AM
- Trump Media & Technology Group Corp. Announces SEC Effectiveness of Amended Form S-1 • GlobeNewswire Inc. • 06/18/2024 08:30:01 PM
- FDA Panel Supports Eli Lilly’s Donanemab, Rio Tinto Expands Stake in Boyne Smelters, and More News • IH Market News • 06/11/2024 11:11:40 AM
- Trump Media & Technology Group Corp. Files Amended S-1 with the SEC • GlobeNewswire Inc. • 06/10/2024 03:08:45 PM
- Apollo Buys 49% of Intel’s Irish Plant for $11bn, BlackRock and Citadel to Create Texas Exchange, and More News • IH Market News • 06/05/2024 11:41:36 AM
- DJT Stock Falls 6% Post-Trump Conviction; UBS Restructures Senior Management for CEO Succession and More News • IH Market News • 05/31/2024 11:54:10 AM
- Trump Media Shares Drop Following Donald Trump Conviction • IH Market News • 05/31/2024 09:19:39 AM
- CalPERS to Oppose Exxon Mobil Directors; Microsoft Unveils Copilot+ PCs with AI Focus, and More News • IH Market News • 05/21/2024 11:18:35 AM
- TMTG Reports First Quarter 2024 Results • GlobeNewswire Inc. • 05/20/2024 08:05:00 PM
- Chubb Stock Soars 9% with Berkshire Acquisition, AST SpaceMobile jumps 37% on AT&T deal, and More News • IH Market News • 05/16/2024 11:27:07 AM
- Tesla’s April Sales Down 18% in China, Amazon’s Multi-Billion Dollar Cloud Expansion in Singapore, and More News • IH Market News • 05/07/2024 11:44:00 AM
- Trump Media Announces Appointment of Semple, Marchal & Cooper, LLP as Auditor • GlobeNewswire Inc. • 05/06/2024 08:15:10 PM
- Trump Media Provides Additional Information to DJT Investors Regarding Recalling Shares • GlobeNewswire Inc. • 04/29/2024 10:00:00 AM
- Coca-Cola and Microsoft Sign Billion-Dollar Agreement, Apple Event Set for May 7, and More News • IH Market News • 04/24/2024 11:28:02 AM
- Trump Media Provides Additional Information To DJT Investors Regarding Short Selling • GlobeNewswire Inc. • 04/23/2024 10:00:44 AM
- Paramount’s Shares Surge Following Sony and Apollo’s Joint Bid; ISS Backs Berkshire Hathaway Director Re-election, and More • IH Market News • 04/19/2024 11:31:22 AM
FEATURED Freedom Holdings Corporate Update; Announces Management Has Signed Letter of Intent • Jul 3, 2024 9:00 AM
EWRC's 21 Moves Gaming Studios Moves to SONY Pictures Studios and Green Lights Development of a Third Upcoming Game • EWRC • Jul 2, 2024 8:00 AM
BNCM and DELEX Healthcare Group Announce Strategic Merger to Drive Expansion and Growth • BNCM • Jul 2, 2024 7:19 AM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM
VAYK Exited Caribbean Investments for $320,000 Profit • VAYK • Jun 27, 2024 9:00 AM