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Round-Up of Current Situation for Red Sea Shipping

FREIGHT

The US Department of Transportation issued an alert Jan. 15 advising merchant vessels to avoid the Southern Red Sea until further notice, amending an alert on Jan. 12 which advised avoidance of the area for just 72 hours.

  • NAVCENT confirmed on X Jan. 15 that the US-owned Gibraltar Eagle container ship, carrying steel products, had suffered a missile attack from Houthi rebels at 1pm GMT Jan. 15 in the seas southeast of Aden. No damage is reported, and the vessel is continuing its journey.
  • This attack follows an attempted strike yesterday when US fighter jets shot down a Houthi cruise missile fired from Yemen towards a Navy destroyer in the Red Sea.
  • These attacks counter the narrative from the Houthis’ chief negotiator who said the Red Sea was safe for all vessels except for Israeli ships or those headed to Israel.
  • Clean tanker transits through the Bab al-Mandab strait are down 39% since the start of 2024 compared to 2023, with dirty tanker transits down 12%, according to Vortexa data, cited by Bloomberg.
  • Currently, about 209 tanker or 4% of the active tanker fleet are caught up in Red Sea escalations according to an Oil Brokerage note Jan. 14. It said Suezmax and Aframax/LR2 were most impacted at more than 5% potentially facing disruption.
  • Tanker Trackers flagged that a US vessel off Yemen had sharply u-turned after the Gibraltar Eagle attack. With six oil tanker diverting or pausing entry to the Red Sea, since the weekend, according to LSEG and Kpler numbers.
  • Regarding LNG flows, QatarEnergy has paused LNG shipments through the Bab el-Mandeb Strait and will send tankers via the Cape of Good Hope.
  • If Red Sea tensions persist long term, the increased insurance premium may make more economic sense to reroute via the Cape of Good Hope according to Clarksons Securities.
  • The Red Sea diversions are “indirectly tightening the market by forcing oil stocks on the water” according to Citi analysts referring to the longer journey time around the Cape of Good Hope.
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