A series of attacks by Houthi militants over the last fortnight recently forced BP to suspend shipments of oil and gas through the Suez Canal
Immediately after BP’s announcement, the price of Brent crude oil increased by 3c and, as we know, retailers won’t hold their breath in immediately passing these additional costs onto the motorist due to their ‘rocket and feather’ pricing strategy.
As we have reported on numerous times over the last couple of years, retailers almost instantly increase their prices when costs rise and then ever so slightly lower them over time – even if their wholesale costs have dropped as quickly as they had risen.
Peter Aylott, director of policy at the UK Chamber of Shipping, said the recent attacks haven’t been seen for a decades: “We haven’t seen missile or drone attacks on merchant shipping like this for over 40 years. It is quite a unique situation.”
The Suez Canal supports 12% of global shipping trade and there is now a significant risk of piracy as tensions escalate.
BP said: “In our trading and shipping business, as in all BP businesses, the safety and security of our people and those working on our behalf is BP’s priority.
“In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea.
“We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”