The global oil tanker industry is increasingly considering the longer route via the Cape of Good Hope to Europe from the Persian Gulf and Red Sea, as a series of attacks in the Red Sea prompt concerns about security. Several market participants, including Maersk Tankers, are including the Cape option in charter agreements, with an additional freight cost of up to $400,000. The potential 9%-12% increase in freight for Middle East to Europe routes could have a cascading effect, tightening supply and potentially leading to a significant increase in freight costs. Owners weigh the impact on loadings in the Red Sea, while charterers and owners navigate additional costs, including higher carbon charges and war risk premiums. The evolving situation raises concerns for ships already in transit without a Cape option clause in their charter agreements.

SOURCE:GOOGLE