Pirates Go After Shipping And Threaten Oil

By Douglas McIntyre  •  February 23, 2024
Jeffry Surianto Pexels

Huge shipping companies have decided not to allow their container ships and tankers to navigate the Red Sea toward the Suez Canal because of attacks by Houthi militia. Efforts by the US and UK militaries have not stopped these. As the ships reroute, many must go to the Cape of Good Hope and into The Indian Ocean. This can add as much as ten days to their journeys, costing up to $500,000 in extra fuel per ship. Among the worries is that this will trigger supply chain problems similar to those many industries suffered from during the start of the COVID-19 pandemic. It increased inflation in many countries and caused central banks to raise rates to fight rising prices. Some of these prices, particularly for food, have stayed the same as high pandemic levels. 

Oil Threat —Attack Of The Drones

Gas Prices —A Huge Drop?

There is a new threat to shipping. Pirates may attack container ships and oil tankers after they leave the Red Sea to sail to the southern tip of Africa. The incidents could further hurt tanker traffic and threaten the oil supply as much or more than the Red Sea attacks. Once again, crude prices could affect global economics. Pirates may now appear in the Gulf of Guinea, which borders Nigeria, Cameroon, and Ghana. Many ships that leave the Red Sea also transit the Indian Ocean off Africa’s west coast that borders Somalia, which harbors pirates that have previously attacked commercial shipping.  Arsenio Dominguez, secretary-general of the International Maritime Organization, said ships should take precautionary measures. The US and UK naval defense of these ships could not possibly cover the thousands of miles the ships needed to travel to reach Asia.

The limits of shipping lanes globally were first caused by drought, which undermined traffic through the Panama Canal. Military actions hurt traffic levels through the Suez Canal. A third threat–pirates–could add another challenge. Inflation, which seemed tamed two months ago, may reemerge because of these obstacles.

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