2024-01-20 09:48:49
Following the continued Houthi attacks on the ships of countries supporting the Israeli occupation, traders, analysts and data from the London Stock Exchange Group revealed that the Brent crude market and some oil markets in Europe and Africa are witnessing a shortage due in part to delayed shipments after some cargo ships avoided traveling through the Red Sea. According to Archyde.com.
The disruption coincided with other factors, including interruptions in production and increased demand in China, intensifying competition for crude supplies that do not need to cross the Suez Canal. Analysts say that the crisis is clearer in European markets.
In a sign of supply shortages, the structure of the futures market for benchmark Brent crude reached its highest levels in two months on Friday, as tankers moved away from the Red Sea after air strikes launched by the United States and Britain on targets in Yemen.
Archyde.com quoted Cable’s chief crude oil market analyst, Victor Katona, as saying that Brent crude futures are the most affected by the disturbances in the Red Sea and the Suez Canal, adding that European refiners are the ones suffering most in the actual markets.
Red Sea disturbances delay shipments
The quantities of crude oil heading from the Middle East to Europe decreased. Kpler data shows that the volume of crude heading to Europe from the Middle East fell by almost half, recording about 570,000 barrels per day in December 2023, from 1.07 million barrels per day in October, according to Archyde.com.
One trader said, “The problems in the Red Sea cause delays, so refiners need to cover their needs from local markets.” Another added, “The market is suffering from a shortage due to the loss of Gulf supplies.”
Other developments led to a shortage in European supplies, including a decline in Libyan supplies due to protests, the first disruption of its kind in months, as well as a decline in Nigerian exports.
Crude supplies from Nigeria also decreased after the country started operating the Dangote refinery, which took over some cargoes.
A trader said that Angolan crude, which is also heading to Europe without having to pass through the Suez Canal, is witnessing increasing demand from China and India due to problems related to Iranian and Russian crude oil, according to Archyde.com.
Chinese oil trade with Iran faltered due to Tehran stopping shipments and demanding higher prices, while India’s imports of Russian crude declined due to currency challenges, although India says the decline is due to unattractive prices.
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