Red Sea attacks cause ‘oil on water’ to surge in February – IEA

Trade disruptions in the Red Sea due to repeated Houthi attacks have moved oil in transit up to record levels, the International Energy Agency (IEA) said in its latest Oil Market Report (OMR).

PHOTO: A container ship passing through the Suez Canal. Getty Images

The ongoing attacks on commercial ships in the southern Red Sea and the Bab al-Mandeb Strait between Yemen and East Africa have boosted “oil on water”, as several oil tankers opted for a longer route around Africa’s Cape of Good Hope, the IEA said.

According to the Paris-based energy agency, nearly 1.9 billion barrels of oil were in transit at the end of last month. This has also sparked concerns about tight supply in the oil market and supported Brent's price gains in recent weeks, the IEA said.

“In February alone, oil on water surged by 85 mb [85 million bbls] as repeated tanker attacks in the Red Sea diverted more cargoes around the Cape of Good Hope,” the IEA added.

Commercial shipping in the Red Sea has been compromised since mid-November 2023 after Iran-backed Houthi militants started striking vessels in the area with drones.

Trade flow disruptions and longer shipping routes also boosted bunker fuel use in February, the IEA noted. As a result, the energy agency projected global oil demand growth for this year to rise by 110,000 b/d from its last month’s calculation to 1.3 million b/d.

By Aparupa Mazumder 

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