In a surprising move, Shell Oil announced today that it has suspended all its oil shipments through the Red Sea, one of the world’s busiest and most strategic waterways, due to the rising tensions in the region. The decision comes after the US and UK launched airstrikes against Iranian-backed Houthi rebels in Yemen, who have been accused of attacking Saudi oil facilities and tankers.
Shell Oil, which operates several oil fields and refineries in Saudi Arabia, said that the safety of its employees and assets was its top priority, and that it would not resume its operations in the Red Sea until the situation stabilizes. The company did not specify how long the suspension would last, or how it would affect its global supply chain and customers.
The Red Sea is a vital route for oil and gas exports from the Middle East to Europe and Asia, as well as for imports of goods and commodities to the region. According to the International Energy Agency (IEA), about 9% of global oil trade passes through the Red Sea, which connects the Indian Ocean to the Mediterranean Sea via the Suez Canal.
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The escalation of violence in Yemen, which has been mired in a civil war since 2014, poses a serious threat to the stability and security of the Red Sea and its surrounding countries. The Houthi rebels, who control most of northern Yemen, have repeatedly launched missiles and drones at Saudi Arabia, which leads a coalition of Arab states that supports the internationally recognized government of Yemen. The Houthis have also claimed responsibility for several attacks on oil tankers and cargo ships in the Red Sea, although some of these claims have been disputed by other parties.
The US and UK, which are allies of Saudi Arabia and have provided it with weapons and intelligence, said that their airstrikes were aimed at degrading the Houthis’ capabilities and deterring further attacks. They also called for a political solution to end the conflict in Yemen, which has caused a humanitarian crisis that affects millions of people.
However, the airstrikes have drawn criticism from some countries and organizations, who accused the US and UK of escalating the war and violating international law. Iran, which denies arming or funding the Houthis but supports their cause, condemned the airstrikes as an act of aggression and warned of serious consequences. The UN, which has been trying to broker a peace deal between the warring parties in Yemen, expressed concern about the impact of the airstrikes on its efforts and called for restraint.
Shell Oil’s decision to halt its Red Sea shipments is likely to have significant economic and geopolitical implications, as it could disrupt the global oil market and increase the pressure on other oil companies and countries to follow suit or find alternative routes. It could also affect the relations between Saudi Arabia and its allies, who depend on its oil exports, and between Iran and its rivals, who accuse it of destabilizing the region.