{"id":76489,"date":"2024-02-01T00:00:00","date_gmt":"2024-02-01T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/logistics\/2024\/02\/01\/the-eu-will-launch-its-naval-mission-by-mid-february-as-energy-traders-and-shippers-scramble-to-manage-risks-and-costs\/"},"modified":"2024-02-01T00:00:00","modified_gmt":"2024-02-01T00:00:00","slug":"the-eu-will-launch-its-naval-mission-by-mid-february-as-energy-traders-and-shippers-scramble-to-manage-risks-and-costs","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/logistics\/2024\/02\/01\/the-eu-will-launch-its-naval-mission-by-mid-february-as-energy-traders-and-shippers-scramble-to-manage-risks-and-costs\/","title":{"rendered":"The EU will launch its naval mission by mid-February as energy traders and shippers scramble to manage risks and costs"},"content":{"rendered":"

<\/strong>Th<\/strong>e EU is set to launch its Red Sea naval mission \u2014 dubbed <\/strong>Apsides<\/a><\/strong> \u2014 by mid-February,<\/strong> and could see its command structure ironed out by next Wednesday, Reuters<\/a> reports, citing comments by EU foreign policy chief Josep Borell. \u201cNot all member states will be willing to participate but no one will obstruct,\u201d Borell told reporters, adding that he hopes to see the mission kicking off by 17 February. Aspides\u2019 mandate will be limited to protecting merchant shipping and foiling Houthi-led attacks, but will not extend to strikes against the Houthis, Borell said. A concept for an independent EU-led mission gathered momentum after some key EU states expressed reservation against placing their forces under US command in US-led Operation Prosperity Guardian<\/a>, which has carried out strikes against Houthi positions in Yemen. <\/p>\n

Who has signed up so far?<\/strong> France, Greece, and Italy have all expressed interest in leading the naval mission, with seven countries so far saying that they will send ships, the newswire said citing diplomats.<\/p>\n

Houthis vow to continue attacks on US and British warships in the Red Sea tha<\/strong>t are <\/strong>participating in \u201caggression,\u201d<\/strong>Reuters<\/a> reports, citing a statement by the group. The militia fired missiles at US warship the USS Gravely, and US Central Command (Centcom) reported they had downed a Houthi anti-ship cruise missile on Tuesday night with no damages incurred to vessels, the newswire added, citing a Centcom statement.<\/p>\n

Houthi attacks against merchant vessels in the Red Sea are not likely to end in the near <\/strong>future,<\/strong> forcing freight carriers to continue rerouting away from the Suez Canal, Reuters<\/a> reports, citing a statement by Hapag Lloyd chief executive Rolf Habben Jansen. While disruptions could continue for up to five months, a political agreement and a naval mission to protect shipping in the region could see the crisis resolved in six months, he said. Reroutes around the Cape of Good Hope have seen journeys extended by some 2-3 weeks, leading volumes transported by the carrier in December to fall some 150k TEU below prior forecasts, Jansen added. The company has sought to soften the blow by buying more containers, spending some USD 350 mn to add 125k TEU to capacity, he added. <\/p>\n

Energy traders, shippers, and producers are all weighing their options as Red<\/strong> Sea disruptions force longer journeys around the Cape of Good Hope<\/strong>, with producers and traders turning to larger tankers to manage risks and costs, and shippers reshuffling routes and refueling points, and accelerating cruise speed to cut back on delays, Reuters<\/a> reports. Buyers are asking for offsets on higher freight rates and war premiums, the newswire said. Although European refiners have seen their costs increase on the back of longer shipping times, their margins were buoyed by falls in the prices for competing refined products from the Middle East and India, the newswire writes, citing traders. Longer journeys have also constrained capacities, tightening the tanker market, traders also said.<\/p>\n

Russian oil traders are rerouting shipments again:<\/strong>Traders moving Russian oil are diverting their shipments around the Cape of Good Hope due to heightened risks of Houthi attacks after a shuffle last year to cut through Suez, Reuters<\/a> reports, citing data from LSEG and market sources. When an EU embargo on Russian oil came into force in February 2023, traders had diverted shipments from Russia to Asia and the Middle East via the Suez Canal, the shortest possible route. Russian oil traders are now rerouting shipments again, taking the longer way to Asia via the Cape of Good Hope facing challenges in terms of finding suitable locations to refuel and restock, as well as rough seas, the newswire added, citing companies and analysts.<\/p>\n

And it\u2019s not just tankers carrying Russian cargoes that are shunning<\/strong> the Red Sea:<\/strong> Tankers rerouting around the Cape of Good Hope has jumped to 100, up 45% from 69 on 24 January, Bloomberg<\/a> wrote yesterday citing an Oil Brokerage report. The diverted tankers are carrying a combined 56 mn barrels of crude and petroleum products, the report said. <\/p>\n

The <\/strong>Trafigura-chartered tanker Marlin Luanda attack<\/a><\/strong> saw freight rates for tankers leap to <\/strong>record highs, matched only by a brief spike durin<\/strong>g the pandemic,<\/strong> the Financial Times<\/a> (FT) reported yesterday. Charters for the largest tankers carrying refined products \u2014 including diesel, petrol and jet fuel \u2014 more than doubled in the past week to USD 101.5k a day, compared to Novembers USD 22.75k average, the FT said citing numbers from London shipbroker Gibson.<\/p>\n

Are Qatar + US LNG cargo swaps on the cards<\/strong>?<\/strong>US and Qatar-based LNG producers are considering swapping their cargoes to get around bottlenecks at the Suez and Panama Canals, analysts told European energy market information provider Montel<\/a> yesterday. Such an arrangement would see US cargoes make their way to Europe to meet Qatari contracts, with Qatari cargoes shipped in turn to US customers in Asia, Montel said. While there is no evidence that such swaps have been made, they \u201cwould make a lot of sense,\u201d as workarounds to logistical snags, Montel cites analyst Robert Brooks as saying, who also noted that cost savings from such a framework could be passed down to clients as an incentive to get on board.<\/p>\n

China calls for de-escalation in the Red Sea, issues two-part condemnation: <\/strong>China is prepared to coordinate with all stakeholders to resolve tensions in the Red Sea, China\u2019s state-run Xinhua<\/a> reported on Tuesday, citing Foreign Ministry spokesperson Wang Wenbin. China condemned the attacks against merchant vessels and called for respect of Yemen\u2019s sovereignty, in what may be understood as veiled disapproval of US-led attacks against the Houthis. Red Sea tensions are intrinsically tied to the war in Gaza, Wang said, adding that a solution there will help relieve tensions. <\/p>\n

ICYMI-<\/strong> American officials had been repeatedly asking China for months to convey warnings<\/a> to Iran not to stoke tensions in the region, but Beijing had so far been reluctant to apply pressure on its Iranian ally.<\/p>\n

OTHER DISRUPTION NEWS WORTH KNOWING-<\/strong><\/p>\n