Worthy Christian News > World News > Yemen’s Houthi Rebels Disrupting Global Trade, Oil and Natural Gas Prices Surge

Yemen’s Houthi Rebels Disrupting Global Trade, Oil and Natural Gas Prices Surge

by Emmitt Barry, Worthy News Correspondent

(Worthy News) – The continued attacks on shipping tankers near Yemen have prompted several shipping companies, along with oil giant British Petroleum, to halt using the Suez Canal in light of the recent attacks by Iranian-backed Houthi Rebels, causing oil and natural gas to spike.

The oil magnet British Petroleum (BP) stated on Monday that the safety and security of its staff and associates are its foremost concern. The statement highlighted BP’s decision to temporarily halt all shipping transits through the Red Sea due to the worsening security situation in the area. The company noted that this precautionary measure will be regularly reviewed, considering the evolving circumstances in the region.

Following the news, there was a significant increase in oil prices. Brent crude, the international standard, experienced a 1.1% rise, reaching $77 per barrel. Similarly, US oil prices climbed by 1%, hitting $72 per barrel. Additionally, the price of Natural Gas witnessed a substantial surge, escalating by 5.5% by early Monday.

This follows in the footsteps of Denmark’s A.P. Moller-Maersk and other freight firms, who responded to increased attacks by Iranian-backed Houthi militants in Yemen targeting vessels in the Red Sea. These developments have led these companies to reroute their operations through one of the world’s vital trade arteries, which experts say could snarl supply chains and drive up freight costs.

According to data from the International Chamber of Shipping, sea vessels are responsible for transporting over 80% of the world’s traded commodities. This signifies that the annual value of maritime trade exceeds 14 trillion dollars, equating to around 16% of the global GDP. This underscores the immense economic significance of the shipping industry in the global market.

The Red Sea, leading directly into the Suez Canal, is essential for shipping between Asia and Europe, offering an alternative to the lengthy journey around Africa. A Middle Eastern tanker can reach Europe in just 17 days via the Suez Canal, compared to 41 days if circumnavigating Africa. This route saves about 30 days, highlighting the Suez Canal’s role as a crucial and time-efficient maritime trade route.

In response to the halt of shipping through the Suez Canal, the United States is actively encouraging its allies and partners to join a maritime coalition aimed at bolstering security in the Red Sea. This initiative involves enhancing support for the existing Task Force 53, with a focus on increasing its capacity to monitor and counteract illicit activities in the region, as reported by U.S. officials.