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Shipping giants reroute container vessels around Africa
The Houthis have claimed repeated attacks in the Red Sea on commercial vessels in the last several days and this is keeping markets on tenterhooks, as the Red Sea is a key waterway for goods and energy. It handles about 12% of world trade - including oil - and it could result in further threats to global supply chains and an extension of hostilities in the Gaza Strip. All this has roiled energy markets. British Petroleum said it's pausing all shipments through the waterway and Norwegian energy company Equinor said it's diverting all its vessels away from the region. Brent is up 3.9% and European gas prices jumped 13%. That's as liquified natural gas tankers often travel between the Middle East and Europe via the Suez Canal. Over the coming weeks, vessels must decide whether to cross through the Suez Canal or via the Cape of Good Hope in South Africa. To give an idea, a vessel crossing the Indian Ocean would take 14 days to reach Malta via the Suez Canal and 33 days via Cape of Good Hope. Analysts also expect spillover effects on other commodities like coffee, soybeans nickel and palm oil as a big portion of the world's trade transits through the Suez Canal.
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