Major tanker owners avoid Red Sea voyages over Houthi attacks

Belgian shipowner Compagnie Maritime Belge and affiliated tanker operator Euronav have stopped their vessel transit via the Red Sea, the company said Dec. 19 following a spate of Houthi attacks on commercial ships.

"We will avoid the area until further notice. We are monitoring the situation very closely," CMB said in an emailed statement. "The safety of our crew and our ships is paramount."

The company has a diverse fleet of 50 dry bulk carriers, 17 chemical tankers and 20 containerships, aside from being the largest shareholder of Euronav with a 49% stake. It plants to launch a full takeover of the Euronext-listed company.

Euronav, one of the world's largest tanker operators, currently owns 56 VLCCs and Suezmaxes.

Separately, major oil tanker owner Frontline is avoiding the Red Sea and rerouting tankers away from the chokepoint where possible, depending on individual chartering contracts, its CEO Lars Barstad told S&P Global Commodity Insights.

The company has a fleet of 75 vessels, both crude and oil product carriers, according to its website.

Euronav and Frontline jointly account for around 4% of the global large tanker fleet, according to calculations by S&P Global.

"Shipowners have limited opportunity to re-route when the vessel is already under contract -- if safety is deemed acceptable," Barstad said.

The precautionary measures came as seven of the world's largest container lines, including Mediterranean Shipping Co., and oil firms like Equinor and BP divert their ships and cargoes away from the Bab al-Mandab Strait.

"Disappointingly few oil majors have adopted BP and Equinor's policy in this respect," Frontline's Barstad said.

In many instances, the diverted ships will need to take the longer Cape of Good Hope route and add at least two weeks to their voyage times, resulting in more ton-mile demand and higher freight rates, potentially pushing up prices of commodities and energy products.

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Platts, part of S&P Global, assessed Dated Brent at $79.18/b on Dec. 18, up 2.7% from the previous assessment and up from $73.56/b on Dec. 12.

Platts assessed the rate to carry a 140,000 mt cargo of crude from the Persian Gulf to the Mediterranean at $15.82/mt on Dec. 19, up 53 cents or 3.5% on the day.

Around 12% of global trade passes through the Suez Canal, representing 30% of all global container traffic and over $1 trillion worth of goods per year, according to BIMCO estimates.

Since announcing its intention to join the Israel-Hamas war that broke out Oct. 7, the Iran-backed Houthi rebels have attacked more than 15 ships in recent weeks. On Dec. 18, the US launched a new naval task force including the UK, Canada and France to restore trade flows in the region.