U.S. and British air strikes on Houthi rebel strongholds in Yemen have not made shipping in the Red Sea safer. "The Red Sea problem is getting worse, not better," said Stifel shipping analyst Ben Nolan.
The dry bulk carrier Gibraltar Eagle was hit by an anti-ship ballistic missile in the Gulf of Aden on Monday. The Gibraltar Eagle is owned by Eagle bulk in Connecticut. On Tuesday, the Greek-owned dry bulk ship Zografia was hit by a missile in the southern Red Sea.
Energy shipping company Shell halted all Red Sea shipping on Tuesday, as did two large Japanese tanker and bulk carrier owners MOL and NYK.
Container ship diversions around the Cape now look likely to last for months. It is almost certain that increases in spot rates resulting from the deviation will extend into 2023 during the annual trans-Pacific contract negotiations, pushing contract rates higher.
The impact of the Red Sea on tanker trade remains uncertain, although the tipping point may be very close. If crude and product tankers move away from the Red Sea and Suez Canal, as container ships do, spot tanker rates should rise as longer voyages consume tanker capacity.
Will oil tankers follow container ships around the Cape of Good Hope?
“The number of container ships sailing to the Gulf of Aden has already fallen sharply, with container shiploads in other shipping sectors declining over the coming weeks,” Jefferies shipping analyst Omar Nokta predicted in a client note on Tuesday. Ship numbers are also likely to drop significantly." The Gulf of Aden leads to the narrow Babel-Mandeb Strait.
Ship location data shows a sharp decline in container traffic, a modest decline in tanker traffic, and almost no decline in dry bulk traffic.
The number of container ships arriving in the Gulf of Aden last week was at its lowest level on record, down 90% from the 2023 average, data from Clarksons Securities showed.
In contrast, bulk carrier arrivals in the Gulf of Aden are in line with historical averages, while tanker arrivals are down 20% compared to 2022-2023 levels, Nokta said, citing data from Clarksons.
Data from commodities analytics group Kpler shows that as of this week, the moving average of tankers passing through the Suez Canal has fallen to 14 ships per day, the lowest level since May 2022, down from an average of 22 ships per day a month ago.
In other words, there are some detours on the tanker side, which is good for rates, but still nowhere near what is happening with container shipping.
