Red Sea exodus in full flow

The Red Sea exodus is gaining traction in multiple sectors with Egypt coming to terms with the fact that it will take a very big hit in revenues generated from Suez Canal transits this year.

Suez Canal transits generated $10.25bn in revenues for Egypt last year. Transit numbers were down 30% in the opening 11 days of January, and plummeted further in recent days as the Houthis in Yemen – abetted by Iranian intelligence and armaments – widen their targets.

Exclusive playback videos created by MarineTraffic for Splash carried at the bottom of this article show Suez transits for the whole day January 16 last year compared to yesterday, highlighting clearly the dramatic shift in world trade.

While container shipping has led the way in veering away from the Suez, as highlighted in the most recent weekly market report from Alphaliner, other sectors including LNG, oil and dry bulk are following suit.

Multiple oil companies such as Shell, ADNOC and Reliance Industries have this week joined BP in suspending their sailings through the Red Sea.

Splash reported yesterday on the Greek-owned bulk carrier Zografia being struck by an explosive device while transiting the southern Red Sea bound for Israel. Following US and UK strikes on Houthi militants last week, a bulker owned by US-based Eagle Bulk Shipping was struck earlier in the week by a missile in the Gulf of Aden. Further sightings of drones and skiffs have been reported this morning.

Jittery insurers are raising premiums and ships with links to the US, UK or Israel are facing added pressure from their insurance providers.

“Underwriters are adding clauses saying no US, UK or Israeli involvement,” Marcus Baker, global head of marine and cargo at Marsh, told Bloomberg yesterday. “Just about everybody is putting something like that in, and many include the words ‘ownership’ or ‘interest’.”

“Shipowners and charterers may find that rerouting around Africa is more cost-effective than incurring the combined costs of Suez Canal transit fees and insurance premiums,” broker Clarksons Securities said in a note this week.

The US military carried out a new strike in Yemen on Tuesday against anti-ship ballistic missiles in a Houthi-controlled part of the country.

Pictured below, traffic along the Suez yesterday (right) compared to the same day a year ago (left).