Shippers mask positions, weigh options amid Red Sea attacks (updated)

Frontline

19/12/2023 07:37

(Updates ship re-routing)
    By Florence Tan and Lisa Barrington
       Dec 19 (Reuters) - A number of container ships are
anchored in the Red Sea and others have turned off tracking
systems as traders adjust routes and prices in response to
maritime attacks by Yemen's Iran-aligned Houthis on the world's
main East-West trade route.
    Attacks in recent days on ships in the major Red Sea
shipping route have raised the spectre of another bout of
disruption to international commerce following the upheaval of
the COVID pandemic, and prompted a U.S.-led international force
to patrol waters near Yemen. 
    The Red Sea is linked to the Mediterranean by the Suez
Canal, which creates the shortest shipping route between Europe
and Asia. About 12% of world shipping traffic transits the
canal. 
    Major shippers including Hapag Lloyd  HLAG.DE , MSC and
Maersk  MAERSKb.CO , oil major BP  BP.L  and oil tanker group
Frontline  FRO.OL  have said they will be avoiding the Red Sea
route and re-routing via southern Africa's Cape of Good Hope.
    But many ships are still plying the waterway. Several ships
underway have armed guards on board, LSEG data showed.
    At least 11 container ships which had passed through Suez
and were approaching Yemen carrying consumer goods and grains
bound for countries including Singapore, Malaysia and the United
Arab Emirates, are now anchored in the Red Sea between Sudan and
Saudi Arabia, LSEG shiptracking data showed.
    Four MSC container ships in the Red Sea have had their
transponders turned off since Dec. 17, the data showed, likely
to avoid detection.
    Some vessels are attempting to mask their positions by
pinging on other locations, as a safety precaution when entering
the Yemen coastline, said Ioannis Papadimitriou, senior freight
analyst at Vortexa.
    Denmark's Maersk on Friday paused all container shipments
through the Red Sea following a "near-miss incident" involving
its vessel Maersk Gibraltar a day earlier. A number of the ships
at anchor in the Red Sea are Maersk vessels, LSEG data showed. 
    On Tuesday it said vessels previously paused and due to sail
through the southern Red Sea and the Gulf of Aden would be
rerouted around Africa.
    The Iran-backed Houthis, who say they are supporting
Palestinians under siege by Israel in the Gaza Strip, have waded
into the Israel-Hamas conflict by attacking vessels in vital
shipping lanes and even firing drones and missiles at Israel,
more than 1,000 miles from the Yemeni capital Sanaa.
    Houthis attacked two commercial shipping vessels in the
southern Red Sea on Monday.(LINK) 
    Industry sources say the impact on global trade will depend
on how long the crisis persists, but insurance premiums and
longer routes would be immediate burdens. 
    Vortexa's Papadimitriou on Tuesday said the price of a
Suezmax to carry crude from the Middle East to Europe has risen
25% in a week. 
    The disruption to energy flows in the Red Sea is unlikely to
have large effects on crude and liquefied natural gas (LNG)
prices, Goldman Sachs said on Monday, as vessels can be
redirected.
    "We do estimate that a hypothetical prolonged redirection of
all 7 million barrels per day of gross (Northbound and
Southbound) oil flows would raise spot crude prices relative to
long-dated prices by $3-4/per barrel," the investment bank said.
    An Asian buyer of naphtha, a petrochemical feedstock
imported from Europe, said their vessels were still using the
Red Sea route as it would take another 7-14 days to re-route via
Cape of Good Hope.
    Some oil tanker owners are inserting a new clause to include
a Cape of Good Hope option into their shipping contracts as a
precautionary measure, shipbrokers said.
    A person familiar with Alibaba's Cainiao logistics arm said
they may see slightly longer delivery times and shipping fees,
but overall the re-routing would have little impact on business.

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 (Reporting by Florence Tan, Trixie Yap and Naveen Thukral in
Singapore, Yousef Saba in Dubai and Casey Hall in Shanghai;
Writing by Lisa Barrington in Seoul; Editing by Michael Perry)
 ((lisa.barrington@thomsonreuters.com;))