Shell Makes Big Shipping Decision
In a bold move, Shell has suspended all Red Sea shipments after Houthi rebels launched strikes on oil tankers navigating the trade route. The Wall Street Journal reported that the suspension is indefinite, and a Shell spokesperson declined to comment on the matter.
The decision comes after the British oil giant experienced first-hand the danger posed by the Houthis. Last month, a tanker chartered by Shell carrying Indian jet fuel was targeted by the rebels with a drone and was harassed by their boats. This incident, along with the ongoing Israel-Hamas war, has prompted other big firms to swerve the Red Sea, which accounts for around 12 percent of total seaborne oil trade. BP announced a pause in all shipments, and Qatar Energy followed suit this week.
While the suspension of Red Sea shipments has caused a slight rise in oil prices, experts say the actual impact on output will be limited. In addition, Shell's decision is just the latest in a string of actions taken by oil companies in response to the increasing threat posed by the Houthis.
The situation in the Red Sea has been escalating in recent weeks. The U.S. today released images of Iranian missile parts and other weaponry seized in a raid on a ship bound for Yemen. This ship is one of many that have been intercepted by the U.S. Navy and its allies, and these incidents, along with retaliatory strikes and the raid itself, have raised tensions across the wider Middle East.
The SEAL raid, which happened last Thursday, was launched from the USS Lewis B. Puller and was backed by drones and helicopters. According to U.S. Central Command, the SEALs discovered cruise and ballistic missile components, as well as air defense parts, which are believed to have been used by the Houthis in their attacks on international merchant ships in the Red Sea.
Central Command also said that the SEALs had sunk the ship carrying the weapons after deeming it unsafe. The ship's 14 crew members have been detained. Despite evidence linking Iran to the weapons shipments, the Houthis have not acknowledged the seizure and Iran's mission to the United Nations has not yet responded to the news.
In a separate incident on Tuesday, a missile struck the Malta-flagged bulk carrier Zografia in the Red Sea. The vessel, which was heading north to the Suez Canal, sustained material damage but no one was injured. The British military's United Kingdom Maritime Trade Operations confirmed the attack, which is the latest in a series of Houthi attacks in the Red Sea.
The Houthis have been targeting ships in the Red Sea since November, claiming to be avenging Israel's offensive against Hamas in Gaza. However, they have frequently targeted vessels with no clear connection to Israel, jeopardizing shipping in a key trade route.
The recent U.S.-led airstrikes in response to Houthi attacks have only further escalated the situation. In retaliation, the Houthis launched a missile at a U.S.-owned bulk carrier in the Gulf of Aden, heightening the risks for all ships in the region.
As the conflict in the Red Sea continues to escalate, Shell's decision to suspend all shipments is a clear signal that the situation has become too dangerous for oil companies to navigate. This move, along with the actions taken by other big firms, is a significant blow to global trade and demonstrates the serious repercussions of the Houthis' actions. The international community will be closely watching as tensions continue to rise in the region and the impact on global trade becomes more apparent.