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Maersk Diverts Ships Away from Red Sea

(FILES) Sailors pass by the Ebba Maersk container ship as they participate in the annual long-distance dhow sailing race, known as al-Gaffal, near Sir Abu Nuair island towards the Gulf emirate of Dubai on June 4, 2022. (Photo by Karim SAHIB / AFP)
(FILES) Sailors pass by the Ebba Maersk container ship as they participate in the annual long-distance dhow sailing race, known as al-Gaffal, near Sir Abu Nuair island towards the Gulf emirate of Dubai on June 4, 2022. (Photo by Karim SAHIB / AFP)
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Maersk Diverts Ships Away from Red Sea

(FILES) Sailors pass by the Ebba Maersk container ship as they participate in the annual long-distance dhow sailing race, known as al-Gaffal, near Sir Abu Nuair island towards the Gulf emirate of Dubai on June 4, 2022. (Photo by Karim SAHIB / AFP)
(FILES) Sailors pass by the Ebba Maersk container ship as they participate in the annual long-distance dhow sailing race, known as al-Gaffal, near Sir Abu Nuair island towards the Gulf emirate of Dubai on June 4, 2022. (Photo by Karim SAHIB / AFP)

Maersk is diverting all container vessels from Red Sea routes around Africa's Cape of Good Hope for the foreseeable future, warning customers to prepare for significant disruption.

Shippers across the world are switching away from the Red Sea - and so the shortest route from Asia to Europe via the Suez Canal - after Iranian-backed Houthi militants in Yemen stepped up attacks on vessels in the Gulf region to show their support for Hamas fighting Israel in Gaza.

The trip round Africa can add about 10 days to journey times and requires more fuel and crew-time, jacking up shipping costs, Reuters reported.

Denmark's Maersk had said earlier this week it would pause all vessels bound for the Red Sea following an attack on one of its ships by the Houthis, and has since begun redirecting ships around Africa.

"The situation is constantly evolving and remains highly volatile, and all available intelligence at hand confirms that the security risk continues to be at a significantly elevated level," Maersk said in a statement on Friday.

As a result, the company, which controls about one-sixth of global container trade, will divert all Maersk vessels around the Cape of Good Hope "for the foreseeable future.”

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Oil Steadies, But on Track for Biggest Weekly Loss in Over a Month

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
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Oil Steadies, But on Track for Biggest Weekly Loss in Over a Month

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo

Crude oil futures steadied on Friday after strong US retail sales data, but Chinese economic indicators remained mixed and prices were headed for their biggest weekly loss in more than a month on concerns about demand.
Brent crude futures gained 8 cents, or 0.1%, to $74.53 a barrel by 0338 GMT, while US West Texas Intermediate crude was at $70.82 a barrel, up 15 cents, or 0.2%, Reuters said.
Both contracts settled higher on Thursday for the first time in five sessions after data from the Energy Information Administration (EIA) showed that US crude oil, gasoline and distillate inventories fell last week.
Brent and WTI are set to fall about 6% this week, their biggest weekly decline since Sept. 2, after OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025 and concerns eased about a potential retaliatory attack by Israel on Iran that could disrupt Tehran's oil exports.
IG market strategist Yeap Jun Rong said while oil prices remained subdued on Friday, there were signs of near-term stabilization after the market factored in fading geopolitical risks over the past week.
"The recent run in stronger-than-expected US economic data does offer further relief around growth risks, but market participants are also side-eyeing any recovery in demand from China, given recent stimulus unleash," he said in an email.
US retail sales increased slightly more than expected in September, with investors still pricing in a 92% chance for a Federal Reserve rate cut in November.
Meanwhile, third-quarter economic growth in the world's top oil importer China was at its slowest pace since early 2023, though consumption and industrial output figures for September beat forecasts.
China's latest data dump offered somewhat of a mixed bag, with the country now officially falling short of its 5% growth target for the year and the absence of a sizable fiscal push seems to leave some reservations on overall oil demand, said IG's Yeap.
China's refinery output also declined for the third straight month as weak fuel consumption and thin refining margins curbed processing.
Markets, however, remained concerned about possible price spikes given simmering Middle East tensions, with Lebanon's Hezbollah militant group saying on Friday it was moving to a new and escalating phase in its war against Israel after the killing of Hamas leader Yahya Sinwar.
Geopolitical risks, such as developments in the Middle East, will continue to drive fears of supply disruptions and in turn short-term spikes in oil prices, said Priyanka Sachdeva, senior market analyst at Phillip Nova.