Navigating Perilous Waters: Houthi Attacks, Global Shipping Turmoil, and Southern Africa's Bunkering Boom

  • Market Insight 2024年2月13日 2024年2月13日
  • 非洲

  • 航运

The escalating attacks by Houthi rebels on vessels navigating the Bab el-Mandab Strait, a critical chokepoint at the Red Sea's entrance, have unsettled the global supply chain. Freight rates and insurance premiums initially surged, leading to vessels opting for the longer Cape of Good Hope route. The global shipping sector now faces imminent disruptions, potentially surpassing those experienced during the COVID-19 pandemic. This strategic maritime passage's vulnerability demands urgent attention and collaborative efforts to safeguard international trade stability.

With the Red Sea security risk now reaching a crisis point, the industry's opinion on navigating this perilous landscape remains divided. While certain carriers, charterers, and vessel owners advocate for controlled diversions around the Cape of Good Hope as a mid-term strategy, others, assuming selective targeting based on national affiliation, continue to navigate the Red Sea despite near-daily Houthi attacks, hoping to avoid the costly delays of rerouting. Since November 2023, we have witnessed a diversion in container vessel traffic from the Suez Canal.[1] An increasing volume of tanker and bulker vessels has now begun to follow suit, driven by retaliatory airstrikes against the Houthi rebels by the Governments of the United States and the United Kingdom, and the escalating daily attacks carried out by the Houthi Rebels in response.[2] Particularly, the recent attack on the Marlin Luanda, allegedly on the basis of the vessels affiliation to the United Kingdom (though chartered by Trafigura and ultimately owned by Luxembourgian institutional investors), has raised further concerns among the vessel owner and charterer fraternity that any and all vessels may be vulnerable.[3]

The Bab el-Mandeb Strait constitutes a vital artery for global trade, with twelve percent (12%) of the world's seaborne goods transiting it via the Suez Canal to enter or exit the Red Sea. It is further estimated that 6.2 million barrels of petroleum products (including crude oil and refined petroleum products) traverses the Strait daily, either through the Suez Canal or the SUMED pipeline, which accounts for more than 9% of the total global seaborne petroleum trade.[4] The route's strategic significance has intensified since European nations transitioned away from Russian oil, supplanting it with crude oil and related products imported from the Middle East. Moreover, despite the Suez Canal’s limitations in accommodating some of the largest crude oil tankers, classified as Very Large Crude Carriers (“VLCCs”), Europe’s fastest passage to the Middle East is through the Suez Canal and Red Sea. Whilst not unprecedented, Houthi attacks on vessels traversing the Bab el-Mandeb Strait were previously restricted to targeting Saudi or Emirati Vessels during flare-ups in the ongoing Yemeni civil conflict. However, the nature of these attacks underwent a drastic shift subsequent to Hamas' attack on Israel on October 7th, 2023. Appearing to have been initially focused on vessels affiliated with Israel or Israeli business interests, these attacks have significantly escalated in recent months, now targeting commercial ships of diverse nationalities and flags.

In light of the ongoing attacks, the Joint War Committee (“JWC”), comprising of underwriting representatives from both the Lloyd’s and the International Underwriting Association of London company markets, widened the high-risk zone in the Red Sea to 18 degrees north (previously only 15 degrees), whilst also expressly adding Guyana to the “risky” shipping list.[5] According to the secretary of the JWC, Neil Roberts indicated that the widening was carried out to reflect the missile range more than anything else and to also alert insurers, as the mass re-routing of vessels shows that owners are well aware of the risks.

The Southern Red Sea has long been recognised by the London insurance market as a high-risk area, requiring owners to only transit the area after notifying their insurers accordingly and paying any applicable additional premiums where necessary.[6] The war-risk premiums quoted for cargoes has skyrocketed between early December and today, as a result of the war-like conditions in the Red Sea. Not only have premiums shot up from 0.05 to approximately 0.1% of the value of the vessel between this period but the terms for war risks quotes have also been significantly shortened, from the typical seven-day cover to no more than 24 Hours on average.[7] Some insurers have historically covered the high-risk areas in their standard marine insurance policies and have now issued cancellation notices relating to war, terrorism, and piracy risks in the surrounding areas of the Indian Ocean, the Gulf of Aden and the Southern Red Sea, in light of the increased risk to vessel and cargo transiting these waters.[8] Owners are thus faced with the choice of re-routing these vessels or footing the bill of the war risks premiums, which continue to rise whilst the Houthi attacks are ongoing.

Overall vessel activity in the Red Sea has, as of the final week in January 2024, plunged to its lowest level since shipowners and charterers began rerouting around the Cape of Good Hope in November 2023.[9] According to Lloyd's List Intelligence vessel-tracking data, only one hundred and ninety-nine (199) cargo-carrying vessels over 10,000 deadweight tons (“DWT”) were active in the Red Sea on the 29th of January 2024.[10] This represents a significant decline from two hundred and fifty-five (255) vessels the week before and three hundred and sixty-seven (367) vessels during the corresponding period in the previous year. The number of transiting vessels is likely higher, considering that some vessels attempt to mask their voyages through the Red Sea by deactivating their Automatic Identification System signals.

The rerouting of maritime traffic away from the Red Sea around the coastal regions of South and West Africa has led to a noticeable increase in congestion at bunkering ports across the continent, putting significant strain on port infrastructure. Bunker suppliers have reported a surge in bunkering demand, both offshore and in-port, across Southern Africa as a consequence of the vessel exodus. This includes ports such as Walvis Bay (Namibia), Nacala, and Maputo (Mozambique), and Port Louis (Mauritius). Industry projections anticipate a shift in bunkering demands to major maritime hubs such as the Port of Singapore and Rotterdam as vessels seek more competitive fuel prices. However, ports along the Southern African coastline experienced a 10 to 15% increase in demand in January 2024 compared to December of the previous year. Notably, the Ports of Maputo and Port Louis, have benefited significantly from an uptick in demand, not only due to the growing number of vessel diversions, but so to from the congestion and supply constraints affecting South Africa’s major bunkering hubs and ports. Moreover, offshore bunkering locations like Walvis Bay have a competitive advantage during trade flow shifts, as most ports prioritize cargo calls over bunkering, and offshore supplies can be arranged and completed more efficiently.

From a South African perspective, the Port of Durban historically stands as the largest bunkering hub in Southern Africa. Despite not necessarily experiencing a marked increase in actual fixtures, recent events in the Red Sea region have led to a notable surge in bunkering interest. This trend is evident not only at the Port of Durban but also at the Port of Cape Town. The heightened demand has resulted in a simultaneous spike in bunker fuel prices. According to Argus Media, bunker fuel prices in the Durban and Cape Town Ports have risen by USD 80 per tonne since December 27, 2023, reaching USD 787.5 per tonne for Very Low Sulphur Fuel Oils (“VLSFO”) on January 22, 2023. These figures contrast with a smaller increase reported in Namibia’s Walvis Bay, where VLSFO prices reached USD 755.25 on January 22nd (up from USD 751 on January 19th), as reported by Bunkerex.[11] However, the suspension of bunker supplies and subsequent constraints in Algoa Bay’s Port Elizabeth, experienced since September 2023, have hindered South Africa’s bunker market in meeting the increased supply and demand trend.

While the South African maritime sector could potentially capitalize on the anticipated 'second wave' of vessel diversions, it cannot overlook the existing challenges facing South African port terminals. The recent surge in congestion at South Africa’s major ports starkly contrasts with the performance outputs of neighbouring competitor ports.[12] Specifically, the Mozambican Port of Maputo reported a record cargo handling performance in 2022, with handling volumes increasing fivefold (from 4.4 million tonnes to 26.7 million tonnes), compared to South Africa’s double-digit fall.[13] The Port of Maputo’s record cargo volumes are directly attributed to strategic investments in port infrastructure upgrades, totalling USD 110 million (R1.9 billion).

State-owned Transnet Port Terminals (“TPT”) reported that the Cape Town Container Terminal achieved a peak performance of 17 container moves per hour during a single shift in the final week of Janaury, showcasing progress despite ongoing productivity fluctuations. This translates to handling 2,388 twenty-foot equivalent units (“TEUs”) within a single day. To enhance operational efficiency and maximize existing equipment, TPT has enlisted global experts specializing in the Navis container management system.[14] These experts are currently working on-site to implement system enhancements. Additionally, a dedicated continuous improvement team has been deployed to address operational challenges, restore consistent performance to acceptable levels, and ensure sustained progress. The terminal currently accommodates four anchored vessels and processes an average of 1,345 truck movements over a 24-hour period. These developments indicate positive strides towards improved efficiency and throughput at the Cape Town Container Terminal.


Volatile freight markets, disrupted deliveries, and prolonged transit times are placing the global shipping market under increasing pressure. Factor in weather disruptions and restrictions in the Panama Canal, and a “perfect storm” seems conceivable. For the time being, however, the general consensus is not to panic. The sanctions imposed on Russian commodities and disruptions caused by pandemic shutdowns have made global supply chains and international shipping more resilient compared to several years ago, preparing maritime entities and stakeholders to better accommodate vessel rerouting and cargo repositioning.[15] After nearly two months of rising container spot rate indices, they have already begun to soften, with a fall of 2.7% this week—the first fall since November 2023.[16] Rates are projected to decline further in the coming months, particularly after February, before stabilizing at a new equilibrium, likely exceeding pre-disruption levels due to higher costs imposed by carriers. Moreover, notwithstanding the disruptions in Quarter One, carriers now anticipate benefiting from 20 to 30% earnings margins—a stark contrast to the losses initially predicted by the lines in 2023.[17] However, the full-year impact remains uncertain, depending on the duration of the rerouting, and it is further warned that underlying supply-demand trends could start to re-emerge once the disruptions begin to ease.

The current conditions in the Red Sea seem to have hit a crisis point leaving most vessel owners with little alternative than to opt for the longer route across the Cape of Good Hope, with this becoming the more cost-effective voyage even if owners were willing to risk it. Amidst all the increased levels of traffic, it will be interesting to see whether the surge in demand for bunkering activities in the Southern African region can serve as the proverbial ‘springboard’ towards establishing bunkering hubs in the region. One guaranteed outcome of the current crisis is the trickling down of the increased costs of transporting goods to consumers globally. 


[1] ‘Houthi Attacks in the Red Sea Disrupt Global Supply Chains’ available at,, accessed on 27 Janaury 2024.

[2] ‘Red Sea Update: Bab El Mandab Strait Passings Drop Further As Carriers Reroute’, available at,, accessed on 02 February 2024.

[3]Trafigura-operated tanker battling fire in Gulf of Aden after Houthi missile attack’, available at, accessed on 31 Janaury 2024.

[4] ‘The Bab el-Mandab Strait is a strategic route for oil and natural gas shipments’, available at, accessed on 02 February 2024.

[5] ‘London marine insurers widen high risk zone in Red Sea as attacks surge’, available at, accessed on 18 Janaury 2024.

[6] ‘Red Sea war insurance rises with more ships in firing line’, available at, accessed on 16 Janaury 2024.

[7] ‘TATA AIG General Insurance excludes Red Sea route, others raise premiums’, available at, accessed on 10 Janaury 2024.  

[8] Ibid.

[9] ‘Red Sea Update: Bab El Mandab Strait Passings Drop Further As Carriers Reroute’, available at,, accessed on 02 February 2024.

[10] ‘Charterers reassess Red Sea risk in light of Marlin Luanda attack’, available at,, accessed on 02 February 2024.

[13] ‘Maputo port gets go-ahead for R38-billion upgrade as SA cargo streams in’, available at, accessed on 03 February 2024.

[15] ‘Almost all ultra-large box tonnage sailing round Cape of Good Hope’, available at,, accessed on 02 February 2024.

[16] ‘Red Sea Update: Bab El Mandab Strait Passings Drop Further As Carriers Reroute’, available at,, accessed on 02 February 2024.

[17] ‘Transpacific spot rates spike as pressure eases on Europe Trades’, available at,, accessed on 01 February 2024.



Megan Canning; Matthew van Maasdyk