BP said on Monday it suspended oil and gas shipments through the Red Sea amid a rise inof .
The energy giant's decision to temporarily freeze shipments sent global oil prices higher on Monday, fueling fears that geopolitical tensions in the Middle East could strangle energy supplies. “In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily suspend all transits through the Red Sea,” BP said Monday in a statement.
Global oil prices rose on Monday, with Brent and West Texas Intermediate crude rising nearly 3% to $73.49 and $78.68, respectively, according to Bloomberg.
At least six energy and shipping companies have halted traffic crossing the Red Sea due to a recent surge in missile and drone attacks on ships and oil tankers from areas controlled by the Houthis, an Iran-backed rebel group based in Yemen. Houthi militants have launched a series of drone and missile attacks against Israel since the Hamas takeover.in the country.
The Houthis intensified their attacks last week, hitting or simply missing ships with no clear links to the conflict. The strikes have caused several of the world's largest shipping companies, including CMA CGA, Equinor, Evergreen, Hapag-Lloyd, Maersk, Orient Overseas and ZIM, stop their activities in the region.
The passage through the Bab el-Mandeb Strait that separates Africa from the Arabian Peninsula is a vital maritime link between the Mediterranean and the Indian Ocean, and approximately 10% of world trade passes through it.
The Suez Canal at the northern end of the Red Sea is the shortest shipping route linking Asia and Europe, making it a popular trade route. according to the United States Naval Institute. Without shortcut access, ships must travel around the Cape of Good Hope at the bottom of Africa, adding days to their journeys and increasing shipping costs.
The United States shot down more than a dozen drones launched by the Houthis last weekend, partly in an attempt to curb disruptions to trade. That could increase geopolitical tensions, according to Height Securities analyst Jesse Colvint.
“If the (Biden) administration does not act aggressively, the Houthi campaign in the Red Sea is likely to continue,” he said in a report. “However, if the administration chooses to attack Yemen, it carries the risk of further escalation with the Houthis' partner and sponsor, Iran.”
—The Associated Press contributed reporting.
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