Houthi Attacks in Red Sea Disrupt Merchant Shipping and Fuel Consumption

Yemen’s Houthi rebels have been targeting merchant shipping in the Red Sea, causing not only a threat to lives and property but also a significant environmental impact. Energy trading house Trafigura reports that tankers are consuming an additional 200,000 barrels per day of fuel oil due to diversions around the Cape of Good Hope, leading to a 4.5 percent increase in annual emissions from the tanker fleet.

Despite established security measures for Red Sea voyages, many vessel operators are opting to take the longer route around Africa’s southern tip to avoid the risks posed by the Houthi attacks. This switch has been adopted by the majority of container ships and a significant portion of tanker and gas carrier fleets, adding 2,000-3,000 nautical miles to their voyages and increasing fuel consumption.

The International Energy Agency (IEA) anticipates a rise in global bunkering demand due to the Red Sea diversions, estimating an increase of about 200,000 barrels per day. This increase is expected to have a notable impact on bunker suppliers in Singapore, a key hub for bunker fuel on east-west routes and one of the ports most affected by the congestion caused by the attacks in the Red Sea.

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