BP is pausing its Red Sea oil shipments following the recent attacks on vessels launched by Houthi militants in Yemen.
“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 in a statement published by Bloomberg.
BP is the latest major company to announce it is avoiding the region and the second tanker market player following a similar decision by Euronav.
In addition, container shipping players HMM, AP Moller-Maersk, Hapag-Lloyd, MSC Mediterranean Shipping Company and CMA CGM have said they would opt for the Cape of Good Hope.
The departure of ships from the Red Sea region comes after a series of escalating attacks from Houthi forces, which control a large swathe of Yemen taken during the country’s nine-year-long civil war.
The attacks started on 19 November, when the 5,100-ceu Galaxy Leader (built 2002) was hijacked as its owner — Ray Car Carriers — has an Israeli principal.
Attacks continued but they intensified after 9 December, when the Houthis said they would attack any ship calling on Israeli ports regardless of affiliation.
Last week, six ships were attacked, most with unclear ties to Israel.
The diversion from the Red Sea and Suez Canal is largely expected to be supportive of shipping rates.
Clarksons Securities analysts said the canal handles 12% of world oil trades in the first half of this year.
Rates for crude, product and chemical tankers could “benefit greatly” from prolonged diversions, the analysts said.
They argued product tanker rates could rally by 12% and suezmaxes could, theoretically, see rates hit $200,000 per day.
Those upturns have not yet materialised: The Baltic Exchange’s suezmax TCE assessment fell $3,212 to $46,128 per day on Monday.
However, European-listed tanker stocks rose on Monday.
Frontline’s Oslo-listed shares jumped NOK 17.65 ($1.70) from Friday’s close to NOK 219.85 in midday trading on Monday.
Chemical tanker owner Stolt-Nielsen, also listed in the Norwegian capital, saw its shares climb NOK 15 to NOK 313.
Torm’s Copenhagen-listed shares rose DKK 11.40 ($1.67) to DKK 198.80.
