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Market Chatter: Chinese Oil Tanker Makes About-Turn in Red Sea Due to Houthi Threats

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A Chinese very large crude carrier has aborted its journey in the southern Red Sea after Yemen's Houthi rebels said they would attack ships bound for Saudi Arabian ports, Bloomberg reported on Tuesday.

The ship left the port of Yanbu with 2 million barrels of crude destined for China but stopped before reaching the Yemeni border on Tuesday morning and then headed back north.

Houthi rebels, aligned with Iran, have threatened to attack ships forced to sail close to Yemen to exit the Red Sea, much like the narrow crossing ships can no longer safely make through the Strait of Hormuz, compounding risks for crude oil supply.

The Chinese ship could divert through the Suez Canal but would need to offload about half its cargo into the Sumed pipeline crossing Egypt from the Red Sea to the Mediterranean. It could then reload at Sidi Kerir and sail onwards, but its journey would then total 17,000 miles instead of 7,000, Bloomberg reported.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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