Showing posts with label oil movement. Show all posts
Showing posts with label oil movement. Show all posts

Saturday 23 December 2023

Importance of Bab el-Mandeb

"Peace with the (Zionist) Jews is in Confrontation, Not in Shaking Hands with Them". This was the title of an article featured on Yemen’s Almaseera website on October 06, just a day before Hamas launched an attack on the southern occupied territories. 

This title serves as a window into Yemen's stance, the ongoing actions of the Ansarullah Movement, and their reaction to Israel’s bloodshed in the Gaza Strip.

On October 31, merely three days following Israel's ground offensive in northern Gaza, Yemen directed a barrage of missiles and drones at the southernmost point of the Israeli-occupied territories, specifically targeting Eilat port.

Following this incident, Yemen made a bold announcement, vowing not to permit Israeli and Israeli-bound vessels safe passage through the Bab el-Mandeb Strait and the Red Sea.

On November 19, Yemenis reported the seizure of the commercial ship Galaxy Leader, diverting its course towards Yemeni shores, marking the beginning of multiple Yemeni attacks on commercial ships en route to Israeli ports.

The international maritime community has been quick to react, with numerous shipping and cargo companies announcing the suspension of transit through the Red Sea due to what they refer to as Ansarullah’s threats.

Looking at the world map, the significance of the Bab el-Mandeb Strait in international maritime transport becomes apparent.

Located between the Red Sea and the Indian Ocean, Bab el-Mandeb stands as one of the most strategic maritime chokepoints worldwide.

After the Strait of Hormuz and Malacca, it is the largest and most pivotal route for oil transportation, with over 6 million barrels of oil, about 4% of the world's total oil flow, passing through daily, mainly bound for Europe. Beyond oil, 30% of the world's natural gas trade traverses this passage.

Passing through this maritime route significantly shortens the shipping routes for vessels circumventing the African continent to reach the Indian Ocean and countries in East and Southeast Asia.

It is a highly desirable and cost-effective route for international shipping and maritime transport companies.

Experts argue that the passage through Bab el-Mandeb reduces transportation costs by at least 15%. Given these considerations, any threat in this strait poses a severe challenge to shipping companies and, consequently, governments.

Increased insurance costs for these shipping companies, coupled with rising oil prices in destination countries and the impact on other commodities in the long term, are undesirable outcomes for any nation.