Updated Dec 18, 2023 - World

BP halts oil shipments through Red Sea following Houthi attacks

Photo: Simon Dawson/Bloomberg via Getty Images

BP announced Monday that it will halt oil tanker transits through the Red Sea in response to recent attacks on vessels by Iran-backed Houthi militants from Yemen.

Why it matters: The oil giant is the latest company to stop shipments through the crucial trading route.

  • Shipping giants MSC, Maersk, CMA CGM and others have also announced that their ships will avoid the area, according to Reuters.

What they're saying: In a statement Monday, BP said the decision was the result of the "deteriorating security situation for shipping" in the Red Sea.

  • "BP will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region," the company added.

Background: Since the Israel-Hamas war started, the Houthis have launched dozens of attacks on vessels they claim were owned by Israeli companies or were heading to Israel, though many of the vessels that were targeted had no affiliation with the country.

  • On Monday, the rebel group claimed to have attacked two vessels in the Red Sea with naval drones, Reuters reports.

By the numbers: The price of oil jumped with BP's announcement, increasing over 2% at around $78.60 a barrel as of 11am ET.

The big picture: Research firm ClearView Energy Partners said it expects other companies could also announce stoppages, which could further increase prices.

  • "In addition, possible U.S. military strikes against the Houthis could also invite further escalation by Iran and/or its proxies," the firm said in a note.

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Editor's note: This story has been updated with a statement from BP.

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