Oil major cancels Red Sea shipping as attacks mount

BP has suspended shipping through the Red Sea, citing the growing risks as Yemen-based Houthi rebels continue attacking ships they believe are carrying cargo to Israel.

The Iran-backed Houthis, who have pledged support for Hamas, sit astride one of the world’s key shipping lanes – roughly 10% of all goods and energy trade traverse the Red Sea en route to or from the Suez Canal. What the Black Sea is to grain – remember that? – Suez is to oil, only more.

Several large non-energy shippers have already scrapped Red Sea routes, but BP is the first energy company to do so. If others follow suit, oil prices could rise, undercutting global efforts to tamp down inflation.

Arab divisions complicate the response. US warships in the Red Sea have been downing Houthi drones by the dozens – 14 this past weekend alone – but Washington is struggling to form a broader maritime protection coalition with Arab allies.

The UAE reportedly wants the US to strike the Houthis directly, while Saudi Arabia worries about endangering a delicate cease-fire in Yemen, where a Saudi-led coalition has battled the Houthis for almost a decade. Riyadh reportedly favors diplomacy via Tehran.

Stay tuned: US Defense Secretary Lloyd Austin is expected to announce a strategy during his trip to the Middle East this week.