Oil giants steering clear of the Red Sea: A number of oil players have paused Red Sea transits following intensified Houthi attacks on vessels passing through the waterway. Global energy giant BP is pausing all Red Sea shipments, Norwegian oil firm Equinor, Belgian oil tanker firm Euronav, and Norway’s Frontline have all made similar announcements over the past 24 hours. Their decisions came shortly after a fuel tanker was struck while moving through the Red Sea.

Western nations have moved to stabilize the situation: Countries including the US, UK, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles, and Spain have created a new maritime task force to ensure vessels passing through the Red Sea are safe from Houthi attacks, US Defense Secretary Lloyd Austin said in a statement yesterday. It’s unclear whether other Arab navies or air forces are participating in “Operation Prosperity Guardian.”

What does it mean?Vessels will be forced to reroute around Africa, rather than use the Suez Canal. Somewhere between 7-10% of global oil shipments (and maybe 85% of the EU’s oil imports) pass through the Suez Canal. And about 4% of global LNG imports passed through the canal this year. Going around the Cape of Good Hope will add thousands of extra miles to journeys for tankers, delaying deliveries, and potentially driving energy costs up as we settle into winter. Research outfit Kpler estimates that about 8% of global bulk cargo flows go through the canal.

Oil prices jumped on the news, with Brent Crude prices rising 1.8% to USD 77.95 a barrel.

Shipping companies did it first: This comes only days after a number of the world’s largest shipping companies announced that they are pausing Red Sea transit due to the repeated attacks by Houthi groups in Yemen, the latest of which was Taiwan’s Evergreen. The shipping giant said that it will temporarily suspend Israel import and export operations until further notice.

Global freight and oil prices are likely to become more expensive and push up global inflation with it. The transit disruptions could also result in affect supply chains, as the delays in shipment leave “retailers with unsellable stock,” the Institute of Export and International Trade’s Marco Forgione told Reuters. Look for prices to go up from now through January — perhaps event into February.

Cause for panic? London's marine ins. market increased the area deemed high risk in the Red Sea. Vessels crossing high risk areas need to notify their insurers when doing so and pay a higher premium.

The Houthis show no signs of slowing down: The Iranian-backed group attacked two cargo ships in the Red Sea on Monday, Reuters wrote.

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