Africa: BP Suspends All Oil Shipments Through Red Sea in Response to Houthi Blockade

18 December 2023
People's Dispatch (Johannesburg)
By Peoples Dispatch

Oil and gas prices have surged following British Petroleum's announcement of shipments pause due to "deteriorating security situation"

On Monday, December 18, oil giant BP announced that it would pause all oil shipments through the Red Sea due to Houthi's blockade of all ships heading to Israel. BP is the first oil and gas company to do so. The Ansar Allah forces had announced its blockade on December 9. Yahya Sare'e, the spokesperson of Yemeni armed forces, announced that the blockade would continue until Israel ended its genocidal war on Gaza and lifted the blockade on the besieged Palestinian territory.

As a result of the blockade, cargo ships have been forced to travel around the African continent rather than through the Red Sea, increasing shipping costs to Israel. For example, by December 12, ocean freight rates to Israel from Chinese ports rose from USD 2,300 for a 40-foot container from the cost of USD 1,975, recorded at the end of November.

"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 stated. "We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region."

Following BP's announcement, the Brent crude oil price today rose 2.7% to USD 78.64 a barrel by 11:15 am Eastern Time. US oil also rose by 2.8% to USD 73.44 a barrel. Natural gas prices also rose, with Europe's prices for natural gas rising 7.7% to EUR 35.75 per megawatt hour.

On Monday, Yahya Sare'e announced two further strikes against ships "linked to the Zionist entity."

"The Yemeni Armed forces vowed to continue to prevent the navigation of vessels heading to Israel until enough food and medicine are allowed into Gaza, where our steadfast brothers are in dire need of inside the Strip," Sare'e stated.

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