Maersk, the prominent Danish shipping company, has suspended all shipping operations in the Red Sea and Gulf of Aden indefinitely following a recent attack on one of its vessels by Houthi militants over the weekend.
The decision to halt operations was an extension of a 48-hour pause initiated immediately after the attack on the container ship Maersk Hangzhou. Houthi militants, reportedly backed by Iran, targeted the vessel, leading to a swift response from U.S. Navy helicopters that sank three attacking boats, eliminating the crews.
“We have made the decision to pause all transits through the Red Sea/Gulf of Aden until further notice,” the company said in an update to customers.
Red Sea tensions initially caused a more than 2% surge in oil prices. However, they later receded, with U.S. crude down 1.14% to $70.83 a barrel, and Brent down 0.88% to $76.36 a barrel.
Maersk announced that an investigation into the incident is ongoing, and all cargo movement through the area will remain paused during the assessment. Vessels will be rerouted around the Cape of Good Hope in Africa when deemed appropriate.
It is to be noted that Maersk only recently, in late December unveiled plans to navigate several dozen container vessels through the Suez Canal and the Red Sea.
The Houthi attacks in the Red Sea have raised concerns about potential disruptions, causing a significant shift in the global shipping industry. Notably, alongside Maersk, global players like CMA CGM are also likely to rethink their decisions to resume Red Sea routes amidst global shipping shifts.
France’s CMA CGM joined the shift on Tuesday, 26th December, 2023, revealing plans to increase the number of vessels transiting through the Suez Canal.
Approximately 12% of global trade and 3 million barrels of crude oil pass through the Red Sea daily, highlighting its crucial role in international commerce.