Red Sea trade disruption hits energy sector after strikes on Houthis

Qatar has halted liquefied natural gas (LNG) shipments through the Red Sea, and additional oil tankers have changed course following disruptions caused by U.S.-led strikes against Houthi militants in Yemen. The attacks on ships by Yemen's Houthis, who claim solidarity with Palestinians, have impacted trade and raised concerns among major powers. The latest incident involves a U.S.-owned bulk carrier reportedly struck by a missile near Yemen's port of Aden. In response to the instability, QatarEnergy, the world's second-largest LNG exporter, has held back gas tankers, and several oil tankers are avoiding the region. The Houthis, originally focused on a war with a Saudi-led coalition, have expanded their maritime targets in response to the conflict between Israel and Hamas. The situation has led to disruptions in supply lines, affecting industries such as car manufacturing. The United States recently reported intercepting an anti-ship cruise missile fired by the militants. Concerns are rising globally, with the UK emphasizing a commitment to protecting free navigation, and China expressing worries about its commercial interests along the Suez Canal. Qatar's vessels have altered their routes, considering a longer journey via the Cape of Good Hope due to security concerns in the Red Sea. Attacks by Houthis are impacting maritime trade through the Suez Canal, prompting some vessels to take an extended East-West route around the southern tip of Africa. The Red Sea connects to the Mediterranean via the Suez Canal, a crucial shipping route between Europe and Asia. Approximately 12% of world shipping traffic transits the canal. The disruptions have led to fluctuations in European gas prices and a drop in Asia spot LNG prices. Oil prices, however, experienced a slight decrease as the Middle East conflict's impact on crude output remained limited.

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