Oil and Gas Prices Surge Due to Red Sea Shipments Pause by BP

Hey, so here’s the deal: Oil and gas prices shot up because BP decided to hit pause on all shipments through the Red Sea. They’re worried about attacks on ships by Houthi militants from Yemen.

BP’s Move and Market Reaction

BP, one of the big shots in oil, put a stop to Red Sea shipments because of safety concerns. That sent oil prices skyrocketing—Brent crude went up by 2.7% to $78.64 a barrel, and US oil rose by 2.8% to $73.44 a barrel.

Even the natural gas market took a hit. Europe’s prices surged up by 7.7% to over €35.75 per megawatt hour. It’s not as crazy high as the record peak in 2022, but it’s a clear sign that things are getting disrupted after these attacks.

Houthi Attacks and International Response

These Houthi rebels, backing Hamas and the Palestinians, have been attacking more since the Israel-Hamas war. They’re blaming Israel for these strikes. Now, the US and its pals are thinking of beefing up security in the Red Sea to protect ships.

Shipping Chaos and Impact

Big shipping names like MSC, Maersk, CMA CGM, and Hapag-Lloyd stopped sailing through the Suez Canal due to safety worries. This could mess up supply chains and bump up shipping costs big time.

Even Evergreen Group jumped in, saying they’re stopping shipping services to Israel ASAP. And they’re not alone—ships are avoiding the Red Sea, and that’s causing some rerouting. Ships are taking the long route via the Cape of Good Hope in Africa, adding up to three weeks to their trip and hiking up fuel costs.

What It Means for You

Hey, more than 80% of stuff you buy globally comes through sea transport. This hiccup could affect how much things cost. Companies might bump up prices on things you buy because moving goods has gotten pricier.

Possible Inflation Impact

Remember how during COVID-19, all those supply chain issues led to higher prices? Well, this could be like that. It might hit companies in Europe and North America hard, especially those selling consumer goods. But, it’s still early to say if prices will stay high. It all depends on how long this mess in the Red Sea lasts.

The Bottom Line

Yeah, it’s a mess, but experts are thinking it won’t be as wild as it was during the pandemic. There’s actually extra space on those shipping containers right now, so rates might not shoot up crazily. But hey, get ready for longer delivery times—it might take a while longer to get your hands on stuff. Operations might slow down a bit, but they should keep chugging along fine.