Houthi Attacks On Red Sea Imperil Shipment Of Indian Fuel To Europe While Surging Towards East Asia (image@PIB_ShipMin)

The Red Sea crisis has led to the disruption of shipments of diesel from India into Europe. The shipping has reached its lowest point since 2022. The Houthi attack has caused higher freight costs and duration which caused the plunge in the flow of trade to the European Union and UK, driving more trade vessels to Asia. Unplanned refinery maintenance call in Asia also added to the distraught, making the economic trade for cargoes through east easier than the west.

Arrival of fuel from India on European dock took a 90% dip during the first two weeks of February when compared to the January’s average. The rate averaged just 18,000 barrel a day during February, as per data provided by Vortexa Ltd., as reported by Bloomberg. James Noel-Beswick, an analyst at Sparta Commodities said that the higher costs of shipping to the west last month also added to the drop in the rate.

He said, “the economist to export east-Singapore region – were a lot better than those west”. Vessels heading to Europe or the Atlantic Basin are forced to take the longer and expensive route through South Africa’s Cape of Good Hope, or else use the Suez Canal, due to the increased Houthi attack in the region.

According to the data, there were no imports of diesel-type fuel coming into Europe during the first two weeks of February and only shipment was gone to UK. As per port report and tanker-tracking data collected by Bloomberg, the Marlin Sicily and Marlin La Plata has recently loaded barrels in India and are headed for Rotterdam. The former is reported to arrive later this month.

Meanwhile, the arrivals of diesel-type fuel from India to Asian destinations like Saudi Arabia and Bangladesh has seen a surge during the first two weeks of February. More cargoes on vessels like Peace Victoria and Orange Victoria are sailing towards the East Asian ports.