UNLIKE the liner shipping sector, the tanker markets have so far seen minimal impact from the fallout of missile attacks on ships transiting the Red Sea, with only a handful of tanker operators announcing potential measures to avoid the Suez Canal route.

Tanker operators exercising caution include BP, which announced yesterday their suspension of Red Sea transits. Norden is also understood to have paused Red Sea transits on a temporary basis.

Meanwhile, Maersk Tankers is believed to have requested its clients for options to avoid the Red Sea, while Torm is said to be looking at the current situation on a case-by-case basis. 

Belgium’s Euronav has yet to announce any precautionary measures although the Tankers International Pool, in which Euronav is a partner, has stated that it will continue to use the Suez Canal via the Red Sea.

“Most shipowners are still generally willing to go through the Red Sea with Greek owners in particular expecting to earn higher spot rates should the situation escalate,” a tanker shipbroker told Lloyd’s List.

The broker said that any upturn in freight rates cannot yet be predicted but the situation in the Red Sea is “likely to support” higher freight rates if trading routes become disrupted.

“Nothing much has materially happened so far — at the moment it feels like business as usual. Should the navies get involved then everything could fizzle out to nothing, but the situation could also get a lot worse.”

BRS said that the so far announced rerouting options account for only a small percentage of oil transits.

“We would need to see a larger extent of rerouting for suezmax ultilisation to be boosted to levels that would be highly inflationary. The immediate positive upward reaction is more likely to be seen in aframax trades in the Atlantic with Europe stepping up imports from the Mediterranean, the US and Latin America in fear of further loss of supplies from the Middle East.”

Approximately 60% of Middle East to West crude is shipped on suezmaxes, while 50% of oil products are shipped on long range two tankers.

“Suezmax and LR2 rates are expected to be impacted the most from a full-scale rerouting as the replenishment wave from east to west will be slower and will trigger a structural supply air pocket in the Atlantic,” said BRS. 

Most crude oil shipped from west to east is shipped on VLCCs via the Cape of Good Hope. Therefore the impact on this trade is expected to be minimal initially until efficiencies from potential wide scale rerouting options spill over from west to the east.

Jefferies Equity Research suggested that the impact from the Red Sea could begin to be felt in a few weeks’ time, as increased rerouting around Africa will tie up vessel availability. This will make less ships available than normal for bookings taking place in January, it said.