British energy giant BP is temporarily suspending all crude shipments through the Red Sea due to recent attacks in the region, joining other major freight firms in the move, the company announced on Monday.
In its statement, BP cited the “deteriorating security situation” as Yemen-based Houthi rebels have targeted ships traversing the area that they believe to be bound for Israel.
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“The safety and security of our people and those working on our behalf is BP’s priority,” the company said. “We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”
Industry experts warned that crude prices could soar in Europe and the Mediterranean if other major oil companies follow suit.
“Right now, it’s unclear how significant the impact will be, though if more shipping companies divert their traffic, and if the disruption lasts more than a week or two, prices are likely to climb further,” Gregory Brew, an oil historian and analyst at Eurasia Group, predicted.
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Many major freight companies have suspended travel via the southern entrance to the Red Sea – the Bab el-Mandeb Strait – as attacks on ships have intensified in recent days.
The Bab el-Mandeb Strait connects the Red Sea to the Gulf of Aden and then on to the Indian Ocean on one side and the Mediterranean Sea via the Suez Canal on the other. The waterway is a key route linking Asia and Europe and facilitates roughly 12% of global trade, including 30% of all global container shipments.
One of the world’s largest shipping firms, Evergreen Line, was among major ocean carriers to announce on Monday that it would no longer carry Israeli cargo via the Red Sea.
“For the safety of ships and crew, Evergreen Line has decided to temporarily stop accepting Israeli cargo with immediate effect, and has instructed its container ships to suspend navigation through the Red Sea until further notice,” the company’s statement read.
Earlier on Monday, Inventor Chemical Tankers, the owner of the MT Swan Atlantic, said its ship was hit by an “unidentified object” while in the Red Sea off Yemen despite there being no links to Israel.
Two global shipping majors, Denmark’s Maersk and Germany’s Hapag-Lloyd, halted their vessels’ passage through the Red Sea on Friday, because of an increased threat of attack.
The world’s largest shipping group, Mediterranean Shipping Company (MSC), took a similar step and announced it was diverting its ships away from the Red Sea.
The Swiss-Italian shipping giant reported that, on December 15, its box ship MSC Palatium III was hit while transiting the Red Sea. “All crew are safe with no reported injuries. Meanwhile, the vessel suffered limited fire damage and has been taken out of service,” the company reportedly said.
Instead of using the Bab al-Mandab Strait, ships will now have to take a longer route navigating around southern Africa.