Disruptions in Red Sea unlikely to have large effects on oil, LNG
(Reuters) - The disruption to energy flows in the Red Sea is unlikely to have large effects on crude oil and LNG prices as vessel redirection opportunities imply that production should not be directly affected, Goldman Sachs said.
Oil prices advanced on Tuesday, extending gains from the previous session, as attacks by Yemen's Iran-aligned Houthi militants on ships in the Red Sea disrupted maritime trade and forced companies to reroute vessels.
Oil major BP temporarily paused all transits through the Red Sea and oil tanker group Frontline said on Monday its vessels would avoid passage through the waterway, signaling that the crisis was broadening to include energy shipments.
"We do estimate that a hypothetical prolonged redirection of all 7 million barrels per day of gross (Northbound and Southbound) oil flows would raise spot crude prices relative to long-dated prices by $3-4/per barrel," the investment bank said in a note dated Monday.
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