Pause in Qatar gas shipments through Red Sea poses new challenge to Suez Canal

Ahram Online , Monday 15 Jan 2024

The world's second largest liquid natural gas (LNG) exporter QatarEnergy suspended LNG shipments via the Red Sea pending “security advice” due to the ongoing escalation in the Red Sea, posing a new challenge to Egypt’s Suez Canal given its close connection to the crucial international trade route.

Red Sea
Members of the Yemeni Coast Guard affiliated with the Houthi group patrol the sea as demonstrators march through the Red Sea port city of Hodeida in solidarity with the people of Gaza on January 4, 2024, amid the ongoing Israeli war on Gaza. AFP


The Qatari company followed other firms' suit— especially after the latest US-UK strikes against Houthi targets in Yemen in reprisal for attacks on Israel-linked shipping near the strategic Bab Al-Mandeb Strait in the Red Sea.

Houthi attacks, which come in solidarity with Palestinians amid Israel’s more than three-month-long war on the Gaza Strip, have prompted global concerns that a wider regional conflict that would disrupt global commerce is looming.

Currently, QatarEnergy has now held back at least four LNG tankers from the Red Sea, a senior source told Reuters on Monday, while assuring that production continues.

According to media reports citing online ship tracking data, three Qatari LNG vessels were heading to the Suez Canal before stopping off in Oman on Sunday. A fourth vessel that was sailing back to Qatar stopped along its route on Saturday in the Red Sea

"It is a pause to get security advice, if passing (through the) Red Sea remains unsafe we will go via the Cape," the source told Reuters on Monday regarding QatarEnergy.

Heading down around Africa's Cape of Good Hope and then back north to Europe would take an extra nine days, compared to the normally 18-day trip to Europe via the Red Sea and Suez Canal route.

The Red Sea is linked to the Mediterranean by the Egyptian Suez Canal, creating the shortest shipping route between Europe and Asia, and is connected to the Gulf of Aden by the Bab Al-Mandab strait between Yemen and Djibouti.

About 12 percent of world shipping traffic transits the canal.

Qatar, which supplied Europe with 16 percent of its LNG imports in 2023, was the single biggest user of the Egyptian Suez Canal for LNG in 2023, according to ICIS, a global source of Independent Commodity Intelligence Services.

The ICIS says around 30-40 laden LNG Qatari tankers cross through the Red Sea each month.

As per recent data issued by the Suez Canal, ship traffic in the international waterway has decreased by 30 percent since the beginning of 2024, compared to 2023.

Suez Canal Authority CEO Osama Rabie attributed the decline to recent tensions in the Red Sea.

The number of vessels passing through the Suez Canal dropped to 544 in 2024, down from 777 in the same period of 2023, Rabie told Egyptian media on Thursday.

The dollar revenues from the Suez Canal have dropped by 40 percent, and the loads shrank by 41 percent, in the period between 1 and 11 January, compared to 2023, he added.

The canal is a major source of hard currency for Egypt.

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