European shipping investors showed little to no reaction to US and UK airstrikes on Houthi militants in Yemen overnight.
It comes amid an escalation of political tensions in one of the world’s most important trade lanes in the past 24 hours after Iran seized a Greek owner’s tanker on Thursday.
While the Red Sea has been a danger zone for shipping for the past months following the intensification of war in the Middle East, seizure of the 58,600-dwt St Nikolas (built 2011) and subsequent retaliation on Houthi assets has taken the conflict to the next level.
While the US and UK coordinated strikes have made global headlines, Houthi militants are undeterred. The Group’s spokesman told Bloomberg it had carried out an initial response to strikes and will expand it “very soon”.
Liner giant AP Moller-Maersk’s Copenhagen-listed class B shares finished Friday up DKK 100 ($14.73) to DKK 13,200 , while tanker owner Frontline saw its shares climb NOK 15.80 ($1.54) to NOK 232.85.
“Tensions are again rising in the Red Sea, and we expect further vessel redirections in the time to come — at least until the situation calms,” Fearnleys analyst Oystein Vaagen said.
“Thus far, container shipping has been the most impacted by far and it is still not clear whether the latest changes will see more impacts in the commodity shipping segments or not.”
In a note published on Friday morning, Arctic Securities said airstrikes alone have “rarely been a game changer” in international conflicts and any Houthi response to the attacks would ensure the security situation in the Red Sea remains fragile.
“The latest developments fade the past week’s talk of companies striking deals with the Houthi militia and makes a period of longer shipments around Africa a virtual certainty, thus effectively leading to some de facto inventory tightening,” the bank said of oil markets.
The apparent disinterest from European investors follows a muted response in Asian markets, with only Seoul-listed Korea Line Corp posting a substantial gain with a 15% rally.
In Oslo, Cool Co — backed by Israeli billionaire Idan Ofer — watched its shares rise NOK 3.70 to NOK 128.10 on Friday. LNG rival Flex’s shares rose NOK 7.80 to NOK 313.40.
Copenhagen-listed Torm followed the trend of modest gains, rising DKK 6.80 to DKK 224.20, while Brussels-listed Euronav slipped slightly, falling €0.05 ($0.05) to €16.03.
Shipping has been dealing with strife in the Bab al-Mandeb strait and the southern Red Sea for nearly two months following an attack on a car carrier whose owner is an Israeli in mid-November by the Iran-backed Houthis.
Attacks intensified in December, with the Iran-backed Houthis announcing they would attack any ship with ties to Israel in an attempt to push Western governments to provide more support for Palestine following an escalation of its conflict with Israel.
The Houthi attacks pushed many owners, largely in the container shipping, tanker and car carrier segments, to divert their ships around the Cape of Good Hope. The moves were a boon to freight markets.
In an attempt to prevent further attacks, a coalition of 14 countries led by the US launched Operation Prosperity Guardian to ensure the free flow of goods through the waterway.
Since, forces have shot down drones and missiles and thwarted an attempt by Houthi commandoes to board a Maersk ship, killing 10.
The airstrikes, launched early on Friday morning local time, were backed by the Netherlands, Australia, Canada and Bahrain.
The UK said it took steps to minimise civilian casualties in part by launching the attacks at night.
