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Oil Tankers Continue Red Sea Movements despite Houthi Attacks

COSCO has suspended shipping to Israel via the Red Sea over rising tensions in those waters. Reuters
COSCO has suspended shipping to Israel via the Red Sea over rising tensions in those waters. Reuters
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Oil Tankers Continue Red Sea Movements despite Houthi Attacks

COSCO has suspended shipping to Israel via the Red Sea over rising tensions in those waters. Reuters
COSCO has suspended shipping to Israel via the Red Sea over rising tensions in those waters. Reuters

Israel's Transport Ministry on Tuesday said it was seeking to clarify Chinese shipper COSCO's reported decision to halt shipping to Israel.

Israeli media this week reported that COSCO had suspended shipping to Israel via the Red Sea over rising tensions in those waters.

“The Administration of Shipping and Ports is working with the relevant parties to clarify the Chinese shipping company's announcement to stop sailing to Israel,” the Transport Ministry said in response to a Reuters query.

Hong Kong-listed shares of Cosco were down 3% on Monday.

Cosco is China's largest shipping firm and holds almost 11% of the trade market share.

Orient Overseas Container Line (OOCL), which is a part of Cosco Shipping Group, has also suspended sailing to the Red Sea and stopped accepting Israel-bound cargo since December, citing operational issues.

“COSCO's decision is significant because it cooperates with Israeli shipping line ZIM, which will have to operate more ships on the Far East routes,” Globes reported.

Cosco has another line it jointly operates with Zim. In an e-mail to CNBC, Zim confirmed that it will continue its operations.

Oil and fuel tanker traffic in the Red Sea was stable in December, even though many container ships have rerouted due to attacks by Iran-aligned Houthi militants, a Reuters analysis of vessel tracking data showed.

The attacks have driven up shipping costs sharply along with insurance premiums, but have had less impact than feared on oil flows, with shippers continuing to use the key East-West passage. The Houthis, who have said they are targeting Israel-bound vessels, have largely attacked non-petroleum goods shipments.

The added costs have not made a big difference to most shippers so far because the Red Sea remains much more affordable than sending cargo around Africa.

But the situation bears watching with some oil companies like BP and Equinor diverting cargoes to the longer route. Also, increased shipping costs are likely to boost exports of US crude to some European buyers, experts said.

“We haven't really seen the interruption to tanker traffic that everyone was expecting,” said Michelle Wiese Bockmann, a shipping analyst at Lloyd's List.

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US Applications for Jobless Claims Fall to 201,000, Lowest Level in Nearly a Year

A help wanted sign is displayed at a restaurant in Chicago, Ill., Nov. 25, 2024. (AP Photo/Nam Y. Huh, File)
A help wanted sign is displayed at a restaurant in Chicago, Ill., Nov. 25, 2024. (AP Photo/Nam Y. Huh, File)
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US Applications for Jobless Claims Fall to 201,000, Lowest Level in Nearly a Year

A help wanted sign is displayed at a restaurant in Chicago, Ill., Nov. 25, 2024. (AP Photo/Nam Y. Huh, File)
A help wanted sign is displayed at a restaurant in Chicago, Ill., Nov. 25, 2024. (AP Photo/Nam Y. Huh, File)

US applications for unemployment benefits fell to their lowest level in nearly a year last week, pointing to a still healthy labor market with historically low layoffs.

The Labor Department on Wednesday said that applications for jobless benefits fell to 201,000 for the week ending January 4, down from the previous week's 211,000. This week's figure is the lowest since February of last year.

The four-week average of claims, which evens out the week-to-week ups and downs, fell by 10,250 to 213,000.

The overall numbers receiving unemployment benefits for the week of December 28 rose to 1.87 million, an increase of 33,000 from the previous week, according to The AP.

The US job market has cooled from the red-hot stretch of 2021-2023 when the economy was rebounding from COVID-19 lockdowns.

Through November, employers added an average of 180,000 jobs a month in 2024, down from 251,000 in 2023, 377,000 in 2022 and a record 604,000 in 2021. Still, even the diminished job creation is solid and a sign of resilience in the face of high interest rates.

When the Labor Department releases hiring numbers for December on Friday, they’re expected to show that employers added 160,000 jobs last month.

On Tuesday, the government reported that US job openings rose unexpectedly in November, showing companies are still looking for workers even as the labor market has loosened. Openings rose to 8.1 million in November, the most since February and up from 7.8 million in October,

The weekly jobless claims numbers are a proxy for layoffs, and those have remained below pre-pandemic levels. The unemployment rate is at a modest 4.2%, though that is up from a half century low 3.4% reached in 2023.

To fight inflation that hit four-decade highs two and a half years ago, the Federal Reserve raised its benchmark interest rates 11 times in 2022 and 2023. Inflation came down — from 9.1% in mid-2022 to 2.7% in November, allowing the Fed to start cutting rates. But progress on inflation has stalled in recent months, and year-over-year consumer price increases are stuck above the Fed’s 2% target.

In December, the Fed cut its benchmark interest rate for the third time in 2024, but the central bank’s policymakers signaled that they’re likely to be more cautious about future rate cuts. They projected just two in 2025, down from the four they had envisioned in September.