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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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Egypt Makes Progress in its Nuclear Energy Project

Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
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Egypt Makes Progress in its Nuclear Energy Project

Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)

Egypt has reported significant progress in the construction of the El-Dabaa nuclear power plant in the country’s northwest, a project being developed in cooperation with Russia. The government announced on Tuesday that more than 20% of the project has been completed.

Egypt and Russia signed a cooperation agreement on November 19, 2015, to establish the nuclear power station at a cost of $25 billion, funded through a Russian government loan. The final agreements for El-Dabaa were signed in December 2017.

The plant will consist of four nuclear reactors with a total generation capacity of 4,800 megawatts, each producing 1,200 megawatts. The first reactor is scheduled to begin operations in 2028, with the remaining units coming online gradually as part of Egypt’s energy mix.

In its quarterly performance report, the Egyptian government stated that the project aligns with efforts to expand the peaceful use of nuclear energy within the national power grid.

President Abdel Fattah al-Sisi emphasized in November the importance of executing energy projects efficiently and on schedule, calling them a pillar of Egypt’s development strategy. He underscored the need to adhere to the project timeline while ensuring the highest standards of execution and workforce training.

Also in November, Prime Minister Mostafa Madbouly reaffirmed Egypt’s commitment to the project, stating that El-Dabaa would enhance renewable energy capacity and stabilize the national power grid.

In early March, Russia’s Atomstroyexport announced that construction on the second reactor at El-Dabaa had progressed ahead of schedule. According to the Egyptian Nuclear Power Plants Authority, the second tier of the inner containment structure had been installed at the reactor building.

Egypt experienced widespread power outages last summer, which ended in late July after securing sufficient fuel supplies for its power plants.

The El-Dabaa project is part of Egypt’s strategy to diversify its energy sources, generate electricity to meet domestic demand, and reduce reliance on imported gas and other fuels.

On Tuesday, the government also announced an additional 200 megawatts of private-sector solar power capacity as part of its efforts to expand renewable energy. Officials said the move would support energy diversification and advance the country’s sustainable development strategy.