Shell suspends Red Sea shipments – WSJ

British oil giant Shell has paused transit through the key Red Sea shipping route indefinitely over fears of attacks following the recent US and UK airstrikes on Yemen’s Houthi rebels, the Wall Street Journal reported on Tuesday.

According to the newspaper, citing people familiar with the matter, last week the company took the step of halting all crossings due to concerns that a successful rebel attack could trigger a massive spill in the region, as well as threaten the safety of the crews on the ships.

The WSJ also cited shipping officials as saying that in December a tanker chartered by Shell to move Indian jet fuel was targeted by a drone in the Red Sea and harassed by Houthi boats.

The oil major’s decision comes as a number of global shippers, including leading energy companies, have started sending their vessels on longer and more expensive journeys around the Cape of Good Hope in Southern Africa. BP announced last month it would pause all shipments through the Red Sea, while LNG exporter QatarEnergy did the same last week.

The Houthis have been attacking vessels thought to be linked to Israel in what they say is a show of solidarity with the Palestinians following the escalation of hostilities in Gaza. However, after Friday's strikes by the US and UK on numerous sites in Yemen, the militant group declared US and British interests “legitimate targets,” claiming “anyone attempting to hinder us from doing so will fail.” 

Meanwhile, economists have been warning that the Red Sea attacks are undermining global commerce. According to the latest report by the Kiel Institute, world trade plunged by 1.3% from November to December 2023 as a result of the attacks on merchant vessels.

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