West Texas Intermediate (WTI) crude oil prices fell more than 2% on Wednesday as global shipping giants prepare to resume Red Sea navigation despite continued missile attacks by the Houthis. , Brent crude oil is also close to a similar decline on the same day.
As of 3:43 p.m. ET on Wednesday, WTI was trading at $74.04, down 2.02%. Brent crude oil was trading 1.86% lower at $79.56.
Oil prices continue to trend lower on the belief that a US-led international task force called Prosperity Guardian will be able to protect commercial ships from Houthi targets in the Red Sea en route to the Suez Canal.
Earlier on Wednesday, Danish shipping giant Maersk confirmed that dozens of ships were scheduled to head to the Suez Canal via the Red Sea after a temporary suspension. The Houthis are targeting commercial ships passing through the Bab al-Mandab Strait between Djibouti and Yemen.
The U.S. Central Naval Command released data showing the Houthis sent at least 15 commercial ships in November and December, with the most recent attack taking place on Tuesday, December 26th.
Maersk and other companies have resumed Red Sea shipping using workarounds, but Germany’s Hapag-Lloyd said on Wednesday it would not follow suit, deeming the Suez Canal route still too dangerous despite U.S. military protection. said. BBC coverage. Instead, the shipping giant will have to reroute ships via the Cape of Good Hope, adding 3,500 nautical miles to the route and increasing shipping costs.
Hapag-Lloyd is the world’s fifth largest shipping company by capacity.
Shippers will continue to assess the situation, and Maersk also noted that “the overall risk in the region has not been eliminated at this stage.”
Written by Charles Kennedy, Oilprice.com