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Shippers mask positions, weigh options amid Red Sea attacks

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A number of container ships are anchored in the Red Sea and others have turned off tracking systems as traders adjust routes and prices in response to maritime attacks by Yemen’s Iran-aligned Houthis on the world’s main East-West trade route.

Attacks in recent days on ships in the major Red Sea shipping route have raised the specter of another bout of disruption to international commerce following the upheaval of the COVID pandemic, and prompted a U.S.-led international force to patrol waters near Yemen, Reuters reported.

The Red Sea is linked to the Mediterranean by the Suez Canal, which creates the shortest shipping route between Europe and Asia. About 12% of world shipping traffic transits the canal.

Major shippers including Hapag Lloyd (HLAG.DE), MSC and Maersk (MAERSKb.CO), oil major BP (BP.L) and oil tanker group Frontline (FRO.OL) have said they will be avoiding the Red Sea route and re-routing via southern Africa’s Cape of Good Hope.

But many ships are still plying the waterway. Several ships underway have armed guards on board, LSEG data showed.

At least 11 container ships which had passed through Suez and were approaching Yemen carrying consumer goods and grains bound for countries including Singapore, Malaysia and the United Arab Emirates, are now anchored in the Red Sea between Sudan and Saudi Arabia, LSEG shiptracking data showed.

Four MSC container ships in the Red Sea have had their transponders turned off since Dec. 17, the data showed, likely to avoid detection.

Some vessels are attempting to mask their positions by pinging on other locations, as a safety precaution when entering the Yemen coastline, said Ioannis Papadimitriou, senior freight analyst at Vortexa.

Denmark’s Maersk on Friday paused all container shipments through the Red Sea following a “near-miss incident” involving its vessel Maersk Gibraltar a day earlier. A number of the ships at anchor in the Red Sea are Maersk vessels, LSEG data showed.

On Tuesday it said vessels previously paused and due to sail through the southern Red Sea and the Gulf of Aden would be rerouted around Africa.

The Iran-backed Houthis, who say they are supporting Palestinians under siege by Israel in the Gaza Strip, have waded into the Israel-Hamas conflict by attacking vessels in vital shipping lanes and even firing drones and missiles at Israel, more than 1,000 miles from the Yemeni capital Sanaa.

Houthis attacked two commercial shipping vessels in the southern Red Sea on Monday.

Industry sources say the impact on global trade will depend on how long the crisis persists, but insurance premiums and longer routes would be immediate burdens.

Vortexa’s Papadimitriou on Tuesday said the price of a Suezmax to carry crude from the Middle East to Europe has risen 25% in a week.

The disruption to energy flows in the Red Sea is unlikely to have large effects on crude and liquefied natural gas (LNG) prices, Goldman Sachs said on Monday, as vessels can be redirected.

“We do estimate that a hypothetical prolonged redirection of all 7 million barrels per day of gross (Northbound and Southbound) oil flows would raise spot crude prices relative to long-dated prices by $3-4/per barrel

Regional

Turkey, Pakistan, Saudi Arabia defence pact technically same as NATO’s Article 5, Turkish minister says

Fidan also said Turkish President Tayyip Erdogan wanted to see the alliance expand, and that Egypt was a potential candidate to ​join, among others.

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A defence pact signed between Turkey, Pakistan and Saudi Arabia is ‌technically the same as NATO’s Article 5 mutual defence agreement, Turkish Foreign Minister Hakan Fidan said on Saturday, adding the accord was not targeting Iran.

Fidan also said Turkish President Tayyip Erdogan wanted to see the alliance expand, and that Egypt was a potential candidate to ​join, among others.

The regional powers signed the “Mecca Joint Defence Agreement” on Friday, wedding Sunni Muslim U.S. allies alarmed ​at a regional conflagration that has brought Iranian missile fire onto Gulf oil exporters.

In a ⁠joint statement, they said the accord intended to strengthen collective deterrence against any act of aggression and stipulates ​that an armed attack against any of the three would be regarded as an attack on all.

Speaking to the ​state-run Anadolu news agency, Fidan said the new alliance was not directed against Iran or any other country, but rather served as a general pledge to support the three allies’ security.

He added that the allies would decide through consultations what degree, form, and format of ​support they would ask for in the event of an attack, but that no country would be considered a ​threat as long as a member state is not attacked.

Turkey, which has NATO’s second-largest army, has said the pact was open ‌to ⁠expansion to other regional countries and did not seek to replace any existing alliances.

“NATO is a giant military alliance where there are 32 countries. We have started here as three countries and we have to take very humble but concrete steps,” he said, adding efforts to finalise the pact had been underway for two years and eight months.

He ​added that a committee ​of ministers similar to that ⁠within NATO would be formed as part of the alliance, as well as a general secretariat based in Saudi Arabia, but that operational details would be set at ​the first committee meeting.

“Our president’s vision is that we don’t remain limited to three ​countries, that ⁠we grow and bring together all (regional) countries under this roof,” he said, adding Egypt could potentially join the pact once certain technical matters are resolved.

In recent months, Turkey, Saudi Arabia, Pakistan and Egypt formed a group to address regional issues, ⁠namely the ​war on Iran. Turkey has said the group – dubbed the R4 – ​aims to solidify its partnership through concrete mechanisms.

Fidan also said Turkey should be involved in an international coalition to protect shipping in the Red Sea ​from Houthi attacks because shipping safety concerned Ankara’s interests.

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Goods transporters to go on strike from Saturday after talks with Pakistan govt fail

However, the minister has assured the transporters that he would discuss their demands, and the next round of talks would be held on Monday morning.

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Goods transporters and oil tanker operators began suspending their services on Friday night after negotiations with the Pakistani government failed, ahead of their nationwide wheel-jam strike scheduled for Saturday.

All Pakistan Goods Transport Itehad spokesman and All Pakistan Goods Transport Owners Association President Mohammad Owais Chaudhry Advocate told Dawn that talks with Federal Minister for Communications Aleem Khan and other government officials had failed.

He said the negotiations ended without a breakthrough, prompting transporters, including edible oil tanker operators, petroleum oil tanker operators, truckers, trailer operators and other intercity transporters, to proceed with their previously announced strike.

“We have informed the government side about the problems we are facing and our concerns,” Chaudhry said, adding that the strike would continue until their demands were accepted.

However, the minister has assured the transporters that he would discuss their demands, and the next round of talks would be held on Monday morning.

The unified body of transporters had already announced that it would begin its wheel-jam strike from August 8, and warned that it would not be a token strike but an indefinite one.

“Commercial goods carriers across the country have already been taken off the roads and will remain stationed at designated places during the protest period,” Chaudhry said.

Among the key demands of the transporters is the uniform enforcement of axle-load limits across the country and permission for 10-wheel vehicles to carry up to 35 tonnes.

They have also demanded reductions in diesel prices and toll taxes, besides seeking relief in withholding tax to ease the financial burden on the transport sector.

The transporters have also called for the withdrawal of customs provisions that, according to the association, allow authorities to confiscate vehicles carrying goods found to be in violation of customs laws.

Other demands include the withdrawal of the Punjab Highway Patrol’s powers to issue challans to commercial vehicles, an end to what the association described as unnecessary challans and excessive fines on motorways and highways, and measures to facilitate the issuance of heavy transport vehicle licences to drivers.

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Regional

Iran FM calls for regional self-reliance and ‘true brotherhood’

“Iran’s powerful armed forces have shown their readiness, capability and might in the face of the world’s most expensive military,” Araghchi wrote.

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Iranian Foreign Minister Abbas Araghchi has called on neighbouring countries to strengthen regional cooperation and rely more on their own capabilities, saying Iran’s armed forces have demonstrated their ability to confront a powerful military.

Araghchi made the remarks in a post on X, where he praised the readiness and capabilities of Iran’s armed forces.

“Iran’s powerful armed forces have shown their readiness, capability and might in the face of the world’s most expensive military,” Araghchi wrote.

The Iranian foreign minister also called for greater unity among Muslim countries, saying that collective action could help the region confront external challenges.

“When Muslims stand together, we can face every challenge by malicious outsiders head-on,” he said, concluding with a call to “rely only on ourselves and embrace true brotherhood.”

Araghchi’s remarks come amid heightened regional tensions and months of conflict involving Iran, Israel and the United States. Tehran has repeatedly called for stronger regional cooperation while warning against foreign military intervention in the region.

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