Traffic slows and costs rise for Bab el-Mandeb and Hormuz transits

August 4 ------ Shipping activity through the Bab el-Mandeb Strait and Strait of Hormuz has slowed following renewed Houthi threats and reported attacks on commercial vessels, with shipping data showing reduced traffic and some tankers altering routes to avoid high-risk areas.

According to Reuters, two tankers carrying Saudi crude crossed the Bab el-Mandeb Strait over the first weekend of August despite a maritime embargo against Saudi Arabia announced by Iran-aligned Houthis on July 20. Kpler data showed commodity vessel passages through the chokepoint fell to 18 on Sunday, compared with 27 on Saturday and 28 on Friday.

The Malta-flagged Suezmax tanker Lesvos, carrying about 1 million barrels of Saudi crude, and the Very Large Crude Carrier (VLCC) Desh Vaibhav, carrying around 2 million barrels of crude bound for India’s Sikka port, transited the Red Sea with their Automatic Identification Systems (AIS) switched off, according to the data.

Separately, a Panama-flagged tanker carrying Russian naphtha diverted around the Cape of Good Hope instead of using the Red Sea route, highlighting growing caution among operators.

Hormuz traffic declines amid reported attacks

Traffic through the Strait of Hormuz, a key route for global oil and liquefied natural gas shipments, also declined following reports of attacks on vessels. Kpler data showed 10 commodity vessels passed through the strait on Saturday, down from 19 on Friday. Only one liquefied petroleum gas carrier loaded in Iran crossed the strait on Sunday, while some vessels may not have been accounted for after switching off AIS signals.

The UK Maritime Trade Operations (UKMTO) has reported additional tanker attacks since Saturday, while Greek shipping company GasLog confirmed an incident involving its LNG carrier GasLog Shanghai on July 31.

Vortexa warns of wider impact on Red Sea energy flows

Analysis by Vortexa showed Red Sea-origin light ends, including gasoline blending components, naphtha and natural gas liquids (NGLs), passing through Bab el-Mandeb had fallen by more than one-third by July 28 after reaching a record high of 1.6 million barrels per day on July 6.

Saudi-origin seaborne exports accounted for around 95% of oil flows through Bab el-Mandeb in June, meaning the Houthi blockade has effectively disrupted a major share of energy shipments through the chokepoint. Saudi exports from western ports including Yanbu, Rabigh and Jizan traditionally move through Bab el-Mandeb to Asian markets such as Singapore and Indonesia. While vessels continue to transit the strait, Vortexa recorded 22 vessel movements through Bab el-Mandeb on July 28, down from 27 on July 19, before the blockade announcement. The number dropped as low as 12 vessels on July 25.

The disruption has increased interest in alternative routes. Vortexa noted that vessels avoiding Bab el-Mandeb must either use longer routes through the Suez Canal, Gibraltar and around the Cape of Good Hope, or seek alternative suppliers. A fully laden very large gas carrier travelling from Saudi Arabia’s Yanbu port to the Philippines, for example, could see transit times increase from 19 days via Bab el-Mandeb to 47 days when avoiding the chokepoint.

Insurance costs rise as risk zone expands

Meanwhile, the London marine insurance market has also expanded its high-risk area in the Red Sea following continued Houthi attacks on commercial shipping.

The Joint War Committee (JWC), which provides guidance influencing war-risk insurance assessments, extended the designated high-risk zone further along the Red Sea coast near Saudi Arabian ports, reaching close to the port of Jizan.

Insurance industry sources told Reuters that indicative war-risk premiums for Saudi ports further north, including Jeddah and the Yanbu oil terminal, increased to 1% of vessel value during the last week of July from 0.25% during the previous week. Premiums for voyages through the southern Red Sea have risen to between 1% and 2%, compared with around 0.3% before the Houthi blockade announcement.

Source: safety4sea.com