Houthi Attacks Reroute Oil Tankers, Threaten Supply Chain and Energy Prices
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As many as 100 tankers carrying 56 million barrels of oil & fuel have been diverted from the Red Sea due to Houthi attacks. This is causing major shipping delays.
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Oil flows from the Middle East to Europe have already dropped by close to 50% due to the shipping disruptions. This will impact Europe the most.
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The rerouting of tankers is causing supply chain issues and production halts for some companies like Tesla and Volvo. It may also lead to higher end prices for consumers.
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So far oil prices have not reflected the supply issues as traders remain focused on China. But delays will be felt over time and could get worse if attacks escalate.
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Saudi Arabia has halted plans to boost production capacity to 13 million barrels per day, reducing spare capacity which could impact prices if demand rises.