Suez and EIA Watch – Demand / Supply getting out of balance?
- Energy freight rates still not reacting to troubles in the Red Sea
- This week saw another increase in container freight rate.
- Seasonality working against higher freight rates. That changes by April.
Greetings from a cold and snowy Copenhagen.
The shipping troubles in the Red Sea are still ongoing and since we covered it last time we have had some developments. We note that Shell has suspended (rerouted) all its shipments through the Red Sea due to concerns over the attacks by the Houthis.
Looking at the below chart we are still to see any major price actions in freight rates for Dirty Suezmax towards Europe, but the price is certainly not going down, it is rather slow grind towards higher price levels.
Chart 1: Small uptick in in Suez prices
The shipping situation keeps worsening with some early spill-overs to the energy space. It remains to be seen whether tankers will be redirected to the extent seen with containers, but the risk remains elevated.