Oil giant BP announced on Monday that it has paused all shipments of oil through the Red Sea after attacks by Yemen's Houthi rebel group.
"In light of the deteriorating security
"We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region," it added.
Oil prices jumped on the announcement. Brent crude, a global benchmark, rose more than 2 percent on Monday afternoon to above 78 U.S. dollars per barrel, erasing earlier loss.
Also on Monday, the United Kingdom Maritime Trade Operations (UKMTO) authority said it had received a report of a possible explosion south of the Yemeni port of Mokha on the Red Sea coast. Later it reported some more incidents in the area, with no further information given.
The Houthi militia on Monday claimed responsibility for attacks on an oil ship and a cargo ship in the southern part of the Red Sea, near the Bab al-Mandab Strait. It said that one was the Swan Atlantic loaded with oil, and the other was the MSC Clara carrying containers.
Since the beginning of the conflict between Israel and Hamas, the Houthi group, which controls large swathes of northern Yemen, has intensified its maritime aggression against Israel-linked ships, launching over ten attacks on vessels in the region.
The Houthis have openly declared their intent to target all ships en route to Israel, irrespective of their national origin, to show solidarity with Hamas.
In addition, the Houthis have issued explicit warnings to international shipping companies, advising against engagement with Israeli ports.
Industry giant Maersk was the first to advise its fleet on Friday to halt all voyages through the Bab al-Mandab Strait, a narrow sea passage near Yemen, which holds immense strategic significance, serving as a major artery for global oil shipments and as a crucial gateway to the Suez Canal.
Other shipping leaders, including Switzerland's MSC, France's CMA CGM, and Germany's Hapag-Lloyd, quickly followed suit, expressing similar worries over maritime security in the region.
If this situation persists, in a worst-case scenario about 25 percent of global capacity would be removed from the market as vessels are forced to sail around the Cape of Good Hope, extending transit times and lengthening the amount of time it takes for each vessel to complete its voyage, according to logistics company Flexport.
"It's too early to determine the impact this will have on international shipping, and is worth noting that the situation is evolving quickly," Flexport said.
As the Suez Canal is a critical artery in global logistics, it noted, "blockages can cause global backlogs of container vessels and shipping delays for everyday goods around the world."
