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Resumption of Red Sea shipping could be near if Houthis uphold halt to ship attacks: PAJ chief

A resumption of Red Sea shipping could be close if the Houthi rebels keep their word on the recently announced halt to ship attacks in the waterway, Petroleum Association of Japan President Shunichi Kito said Jan. 22.

“If this turns out to be the actual situation or true, the resumption of Red Sea shipping could be near,” Kito told a press conference in Tokyo, referring to a recent announcement from the Houthi fighters about ship attacks in the Red Sea.

The comments from the head of the Japanese oil industry come as Yemen’s Houthi rebels announced a major pullback from attacks against shipping in the Red Sea, saying that they will now only target ships with strong links to Israel, following the Gaza ceasefire deal between Israel and Hamas.

Ships heading for Israeli ports, including those partially owned by Israeli individuals or entities and managed or operated by them, are exempt from attacks as of Jan. 19, according to a statement from the Houthi fighters.
Attacks on wholly owned or Israeli-flagged ships in the Red Sea, Bab al-Mandab Strait, the Gulf of Aden, the Arabian Sea and the Indian Ocean will cease only after all phases of the Israel-Hamas ceasefire agreement have been implemented, which are expected to take at least six weeks from their commencement Jan. 19 and possibly even years.

Despite the Gaza ceasefire, there are still some risks involved, particularly if the current geopolitical tensions extend to Israel and Iran, Kito said.

“Indeed, I now see if the geopolitical tensions extend to a greater level between Israel and Iran as a key factor,” Kito said, adding that such a risk has not disappeared to date.

The Red Sea region continues to be categorized as a high-risk area by the Joint War Committee of Lloyd’s, which provides guidelines to maritime insurers for setting their respective premium rates.

Oil transits via the Bab al-Mandab Strait at the southern end of the Red Sea fell to 2.5 million b/d in 2024 from 6.9 million b/d in 2023, while those via the Suez Canal — which connects the Red Sea and the Mediterranean — dropped to 3.9 million b/d from 7.9 million b/d, according to S&P Global Commodities at Sea(opens in a new tab).

LNG ship transit via the Red Sea and through the Suez Canal has been halted for more than a year due to the escalation of attacks on merchant ships.

Middle East oil
Japan relies heavily on Middle Eastern crude. The fourth-largest crude importer in Asia purchased 2.191 million b/d from Persian Gulf suppliers in the first 11 months of 2024, accounting for more than 95% of its total crude imports during the period, the latest data from the Ministry of Economy, Trade and Industry showed.

The country imports most of its Middle Eastern crude oil from the Persian Gulf, with refiner Taiyo Oil being Asia’s only buyer of Saudi Super Light from the Red Sea.

Taiyo Oil said Jan. 21 that it will continue procuring Saudi Super Light crude from the port of Yanbu in the western part of Saudi Arabia, following the Houthi rebels’ announcement of their withdrawal from attacks on shipping in the Red Sea.

“We will continue procuring [Saudi Super Light crude] while closely monitoring the situation,” a company spokesperson told S&P Global Commodity Insights.

Despite the high-security risk, Taiyo Oil is willing to take the chance by using “neutral-flagged” ships to transport the light sour Saudi crude, Taiyo Oil President and CEO Takahiro Yamamoto previously said.

Earlier in January, Saudi Aramco raised the Asia-bound February official selling price differential for the Arab Super Light grade by 50 cents/b month over month to a premium of $2.25/b to the Oman/Dubai average.
Source: Platts

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