Since November 2023, Houthis from Yemen have been attacking commercial shipping in the Red Sea. The aggression has been concentrated in the Bab al-Mandab Strait, which is the body of water between Yemen and Djibouti.
The disruption to shipping has resulted in short-term supply chain problems and has caused concern among some shipping firms; Mintec heard reports that certain tankers have been forced to re-route around Africa instead of sailing through the Red Sea, which is significantly increasing shipping time. For reference, the Shipping Baltic dirty tanker index [Mintec Code: EK51] averaged 1,295 for the week ended 3rd January, up 8.1% week-on-week (w-o-w), representing a 10.4% month-on-month (m-o-m) increase.
Despite the uncertainty in the region, the Brent crude oil price (DH-0) [Mintec Code: BCRD] has been relatively stable. For the week ended 3rd January, the Brent crude price averaged $77.32/barrel, down 2.9% w-o-w, representing a 1.2% m-o-m decrease. Market sources indicate that the global crude oil supply is ample amid record US production forecasts by the Energy Information Administration, and despite continued output cuts by the Organization of Petroleum Exporting Countries (OPEC); thus, the impact of the incidents in the Red Sea has so far had limited impact on the crude oil market.
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