OIL and gas giant BP said it will pause all shipments through the Red Sea following an escalation in attacks on merchant vessels by Houthi militants.

The decision, the most tangible sign of disruption to energy flows since the attacks spiralled, comes days after all the world’s largest container shipping lines said they were temporarily halting. The step applies to all the ships that BP owns and all those it charters.

“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.

The disruptions are a stark reminder of the inflationary and economic pressures that make securing the area a top priority. The US and its allies are working on a plan to do that, but it hasn’t been finalised yet. Avoiding the Red Sea means sailing around Africa, adding thousands of miles to voyages and delaying cargo deliveries.

Two big oil tanker owners, Maersk Tankers and Euronav, also said late last week that they were insisting on options giving them the right to avoid the area.

Israel link

The Iran-backed Houthis say they are targeting any vessels with a connection to Israel, although those links have appeared increasingly tenuous in the past week or so.

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Three container ships came under attack in the space of about a day late last week, prompting owners including MSC Mediterranean Shipping, AP Moller-Maersk, CMA CGM – the top three – to announce plans to stay away. 

There are 46 container vessels that have diverted around the southern tip of Africa rather than using the Red Sea and a further 78 awaiting instructions, Ryan Petersen, the founder of logistics firm Flexport said on X.

Diverting means ships can’t use Egypt’s Suez Canal, a conduit for 12 per cent of global seaborne trade. 

Oil and gas

Europe’s headline natural gas price surged by as much as 7.9 per cent on the news before paring their gains. Brent oil futures also rose.

“We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region,” BP’s statement said. The decision applies to all the ships that the firm owns and all those it hires.

BP’s approach will put pressure on other firms to follow suit.

A crewing company that puts thousands of crew on ships from a pool of more than 44,000 workers said earlier that it was advising owners to consider alternatives to the Red Sea.

Crew welfare

BP said that the welfare of its crew is the company’s priority, underscoring that commercial pressures are – for now at least – taking a back seat in big firms’ decision-making.

The canal has emerged as the main route for global LNG trade over the past two years, bolstered by Europe’s appetite for the super-chilled fuel as the main replacement of piped Russia gas. Its importance has amplified this year as Asia-bound cargoes take longer routes amid Panama Canal congestion.

The LNG vessel Celsius Geneva, heading empty to Suez, last Friday diverted away from the Red Sea to go the longer route via the Cape of Good Hope instead, ship-tracking data on Bloomberg show. Gunvor Group, which controls the carrier, declined to comment on why. BLOOMBERG