Two oil tankers loaded with Saudi crude for China and India made U-turns in the Red Sea on Tuesday, heading towards the Suez Canal rather than braving the Yemeni coast at the sea's mouth following a warning from Yemen's Iran-aligned Houthi militia.
The changes in direction by the ships, the Xin Long Yang and the Rodos, suggest a second potential disruption to a major shipping route that could compound the shortfall in global energy markets caused by the closure of the Strait of Hormuz.
The Houthis on Monday declared a naval blockade against Saudi Arabia, opening a potential new front in the U.S.-Israeli war with Iran and raising the threat to global energy supplies and trade beyond the Gulf.
The group, in an email sent to shipping companies, warned them not to load or discharge cargo at Saudi Arabian ports and said such activity may result in being targeted "in any location".
The Houthis control northern Yemen, including the coast of the Bab el-Mandeb, the strait at the mouth of the Red Sea. Since the Strait of Hormuz controlling access to the Gulf has been blocked during the war, Saudi Arabia's Red Sea port of Yanbu has become the main alternative route for Middle East oil, allowing exports of millions of barrels per day.
War risk insurance costs have already ticked higher in the past 24 hours with risk assessments for Saudi ports being re-evaluated, insurance industry sources said on Tuesday.
"Vessels calling at Saudi Arabian ports are advised to reconsider transiting the Red Sea and to consider implementing enhanced mitigation measures," British maritime security company Ambrey said, adding that it assessed vessels calling at Saudi Arabian ports "were at high risk".
U-TURNS AT SEA
The Xin Long Yang, a Very Large Crude Carrier which completed the loading of 2 million barrels of Saudi crude at Yanbu on Monday, was originally heading to exit the Red Sea to go to China, but made a U-turn and was heading to Suez instead, shipping data showed.
The smaller tanker Rodos, which had loaded about 700,000 barrels of Saudi crude for India, also made a U-turn for Suez on Tuesday, according to the data.
Dynacom Tankers Management, which manages Rodos, and Cosco Shipping, manager of Xin Long Yang, did not immediately respond to requests for comment.
Another VLCC, New Prime, which was scheduled to arrive at Yanbu later this week to load crude, has also turned back off Oman before entering the Red Sea. Its manager Associated Maritime Co HK did not immediately respond to a request for comment.
Three shipping sources said Yanbu was still operating to load oil onto ships that were already in the Red Sea or arriving via Suez. Ship tracking data showed a tanker, the Olympic Luck, which had passed into the Red Sea through Suez, was still heading for Yanbu, as were several ships that were already close by.
But forcing tankers to use the Suez Canal rather than exit the Red Sea through the Bab el-Mandeb would add weeks to shipments to customers in Asia, requiring sailing through the Mediterranean and around Africa.
"While an actual blockade seems unlikely given the resources required for such an undertaking, a step-up in hostilities could see Houthis targeting Saudi-associated ships transiting the Bab el-Mandeb strait," ship broker Clarksons said in a note on Tuesday.
In recent months on average 10 crude tankers have sailed through the Bab el-Mandeb daily.
"However, should Houthis affect traffic through the region, we could see a reshuffling of crude cargoes in which Yanbu volumes are increasingly directed towards Europe."
Fully laden VLCCs transiting the canal must first unload some of their oil, which can bypass the canal by being pumped through the SUMED pipeline to the Mediterranean.
Source: Reuters
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