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US/UK Strikes on Houthi Rebels Risks Further Shipping Retaliation


Oil is higher as Middle East tensions ratchet up after the US and UK strike Houthi rebel targets in Yemen in response to attacks on international shipping trying to pass the Bab-el Madeb strait in recent months.

  • The prolonged journey around the Cape of Good Hope for ships avoiding the Suez Canal route risked adding further inflationary pressures on nations reliant on the global trade route.
  • Maersk’s CEO said to the FT Thursday that the redirection was adding 50% to its fuel bill, something that would end up passed onto end consumers.
  • The disruption has been mainly a container story but global oil and energy flows were showing increasing levels of impact.
  • The total number of tankers carrying clean petroleum products — gasoline, diesel and jet fuel — through the Bab el-Mandeb Strait at the southern end of the Red Sea was down by 47% in the week through Jan. 7 from around a month earlier, according to Vortexa.
  • Crude and fuel oil vessels were down 27% over the same period it said.
  • Shipping analysts have warned that the US and UK strikes could result in further retaliation towards shipping by the Houthi rebels and drags their supporter, Iran, deeper into the escalation.
  • Houthi rebels claim they are attacking the ships in response to the Israeli attacks on Hamas in Gaza.

Source: Vortexa/Bloomberg

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