Red Sea shipping disruption now in focus as vessels are forced to change course

<p class="text-align-justify" style="text-align: justify;">If you think having the Strait of Hormuz closed is bad enough, it looks like things may yet get worse with shipping disruptions now starting to hit the Red Sea. For some context:</p><ul><li><a href="https://investinglive.com/news/iran-reportedly-tells-houthis-to-close-red-sea-oil-route-if-us-decides-to-strike-power-infrastructure" rel="follow">Iran reportedly tells Houthis to close Red Sea oil route if US decides to strike power infrastructure</a></li><li><a href="https://investinglive.com/commodities/oil-icymi-houthi-blockade-threat-forces-saudi-crude-tankers-to-turn-back" rel="follow">Houthi blockade threat forces Saudi crude tankers to turn back</a></li></ul><p class="text-align-justify" style="text-align: justify;">According to shiptracking data cited by Reuters, four tankers have changed navigational course in the Red Sea today. Of note, two of the four tankers have now listed the Suez Canal as their next desination in trying to transit through the area. Here's a better look at things with the red zones being the Strait of Hormuz and the Bab el-Mandab strait:</p><p class="text-align-justify" style="text-align: justify;"></p><p class="text-align-justify" style="text-align: justify;">The most impacted by the disruption of transit through the Red Sea will be Saudi oil, in particular its main Jeddah port.</p><p class="text-align-justify" style="text-align: justify;">In adding to the above, the shiptracking data is also reporting that there is a vessel now reporting that it has changed course in the Gulf of Aden on approach to the Red Sea after previously signaling that Jeddah was its port of destination. If anything, that is a signal that any vessels looking to be headed to/from Saudi Arabia will potentially be under threat of being fired upon.</p><p class="text-align-justify" style="text-align: justify;">At the same time, the EU naval force is out with a warning now to advise ships with US, Israeli, or Saudi links to avoid all Red Sea voyages for the time being. The warning says that ships with related links to the countries listed are now at higher risk of attack by the Houthis. As such, they are advising said ships to turn away until the threat level decreases.</p><p class="text-align-justify" style="text-align: justify;">As a reminder, any disruption to the strait here could potentially take away up to 8-9 million barrels of oil per day. And that will just add to the energy market dislocation from the Strait of Hormuz closure.</p><p class="text-align-justify" style="text-align: justify;"></p>

This article was written by Justin Low at investinglive.com.

This article was sourced from Forexlive. WealthWire aggregates financial news for informational purposes only. This does not constitute investment advice.