MOSCOW, January 17 Transporting oil bypassing the Red Sea is more expensive — if companies follow alternative routes for a long time, this will lead to an increase in the price of “black gold” by 3 -$4 per barrel, said Finam FG analyst Alexander Potavin.
“The route through the Suez Canal is one of the important routes for seaborne oil supplies, which accounts for about 10% of global flows. Bypassing the problem area around Africa increases the travel time between Asia and Europe by 10-14 days. This means an increase in the cost of maritime logistics services, growth the cost of cargo insurance, which means it increases the cost of final fuel,” the expert said.
“About 7 million barrels of oil per day pass through the Red Sea from north to south and back. It is estimated that if logistics changes for a long time, then this could increase spot oil prices by about 3-4 dollars per barrel, since in this case «The volume of reserves in floating storage will increase, and the availability of commercial reserves will decrease globally. Oil supplies along the Northern Sea Route in the foreseeable future will not compete with traditional routes due to too harsh climatic conditions,» he added.
The ruling Ansar Allah movement in northern Yemen, which controls much of Yemen's Red Sea coast, had previously warned of its intention to attack any ships linked to Israel, calling on other countries to recall their crews and not approach them at sea. A number of shipping companies have decided to suspend transportation through the Red Sea. The US and UK launched strikes on Houthi targets on Friday night, calling it a response to a threat to freedom of navigation in the Red Sea.
Anglo-Dutch energy company Shell has indefinitely suspended shipments through the Red Sea due to fears of an escalation of the military situation, the Wall Street Journal reported on Tuesday, citing sources. In December, British BP announced the suspension of oil transportation through the Red Sea. This week, Qatar Energy also suspended supplies of liquefied natural gas.