- ARAB NEWS
- 28 Apr 2024
Since 1975
JEDDAH: Shipping container giant Maersk on Friday diverted all its vessels from the Red Sea to the Cape of Good Hope in southern Africa amid continuing attacks on maritime traffic by the Iran-backed Houthi militia in Yemen.
The Danish company, which controls about a sixth of global container trade, said the diversion would remain place “for the foreseeable future,” and warned its customers to expect “significant disruption to the global network.”
It said: “The situation is constantly evolving and remains highly volatile, and all available intelligence at hand confirms that the security risk continues to be at a significantly elevated level.”
The trip round Africa can add about 10 days to journey times and requires more fuel and crew-time, significantly increasing shipping costs.
The diversion will deepen concerns about a prolonged disruption to the worldwide delivery and supplies of goods from clothing to cars. Houthi militants attacked one of Maersk’s container vessels in the Red Sea on Jan. 1, with attackers trying to board the ship.
A US-led multinational naval operation to try to safeguard commerce in the Red Sea has been under way since Dec. 19, and India is providing protective escorts to Indian container ships around the waterway.
Meanwhile growing regional tension has led to a rebound in the price of oil. Global benchmark Brent crude was up by more than a dollar at $78.76 a barrel, and US West Texas Intermediate rose by $1.62 to $73.82. Both benchmarks recovered from losses on Thursday.
The price rebound was “a reminder of the risk that is rooted in ever-growing tension in the Middle East,”analyst Tamas Varga said.
