The Daily View: Red Sea risk remains, so does the traffic
ON JULY 6, as rocket-propelled grenades exploded into the hull of the bulker Magic Seas(IMO: 9736169), 31 ships passed through the Bab el Mandeb.
The following day, as anti-ship ballistic missiles rained down on Eternity C(IMO: 9588249) and Houthi skiffs swarmed for hours, uninterrupted by the absent naval forces, 34 other ships transited, according to Lloyd’s list Intelligence vessel tracking.
Before and since those attacks, the daily flow of maritime traffic has remained obdurately unmoved by the violence around it.
For those operators who consider their vessels not to be a target, the activities of the Houthis remain an irrelevance and their ships will continue to trade alongside the 40% of vessels which never left.
Some of the Red Sea remainers are inevitably shadow fleet and sanctioned tonnage, but mostly this is a question of national affiliation, transiting history and perceived risk.
Both Magic Seas and Eternity C had Greek ownership, but it was their owner’s willingness to allow other ships in their fleet to call in Israel that made them a target, not their nationality.
As BRS pointed out in its latest analysis, Greeks remain the top Bab el Mandeb tanker transiters, making up 23% of the voyages this year. That’s closely followed by UAE (18%), Russia 8%) and China (8%), all of whom appear to feel safe.
Trusting the numbers is a far cry from actually sailing through the danger zone though, which is why AIS messages are now pleading ‘ALL MUSLIM CREW’ in the hope that might dissuade the Houthi targetters.
Realistically, if you are prepared to take Houthi statements at face value — historically a dangerous bet — and your perceived associations fall outside the known risk markers, the volume of rockets flying, seafarer body count or absence of naval support is not going to dissuade you from your previous assumption that the Red Sea remains worth the risk.
That cynical calculation explains why transits have, and will continue to remain undented.
A shift in the market may yet see numbers go up from here, regardless of rockets. One of the key reasons we haven’t seen more go back during the seven-month lull that preceded the latest attacks was pretty lacklustre markets. As BRS suggested, that gave owners a natural incentive not to risk their ships for less than spectacular hire rates.
But ultimately this has little to do with shipping’s risk appetite. Until the Houthi threat is convincingly contained and a Middle East peace process shows some tangible results rather than just sporadic rhetoric, the risk factors remain well understood and there is little chance that traffic volumes will change significantly.
Richard Meade
Editor-in-chief, Lloyd’s List
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