The Energy Information Administration (EIA) has reported that since attacks on vessels using the shorter Red Sea route started, shipments of crude oil and oil products between Asia, the Middle East, and the West have increased by 47% on a global scale.
Since the Red Sea and Egypt’s Suez Canal historically accounted for about 12% of all shipping traffic worldwide, taking the longer route around the Cape of Good Hope to avoid attacks by Yemen-based militant outfit has resulted in higher shipping costs.
The EIA stated that, based on ship tracking data from Vortexa, about 8.7 million barrels per day (bpd) of crude and refined products travelled the Southern Africa route in the first five months of 2024, up from an average of 5.9 million bpd in 2023. The majority of the increase in volume was attributed to oil product volumes.
Saudi Arabia and Iraq sent more crude oil to Europe via the Cape as opposed to the Red Sea and Suez Canal, making up 15% of the total increase.
Refiners from Asia and the Middle East accounted for 29% of the increased trade, increasing their exports of refined products to Europe and rerouting the cargoes around the cape.
The EIA reported that overall US trade around the cape increased by roughly one-third, or little over 600,000 bpd, and that the United States received crude oil and refined products from the Middle East and Asia in addition to sending more goods to Asia.
Since the Houthis claimed that their attacks on shipping were an expression of support for Palestinians during the Gaza War, attacks on Russian vessels have become more frequent.
In the first five months of 2024, Russia sent almost four times as much crude oil and refined products, including amounts from the Caspian Pipeline Consortium, to Asia around the cape as it did in 2023.