The situation in the Red Sea, with Houthi rebels targeting Israel-bound ships and the U.S. and U.K. responding with airstrikes, is disrupting global trade as more oil tankers steer clear of the key shipping route, resulting in increased costs and delivery delays. This is how energy and oil stocks are responding Tuesday.
U.K. oil major Shell decided to suspend all shipments through the Red Sea indefinitely Tuesday, according to a report by the Wall Street Journal. Shell on Tuesday also agreed to sell its Nigerian onshore oil subsidiary for up to $2.4 billion.
The company will receive $1.3 billion initially for Shell Petroleum Development Company of Nigeria with the buyer, a group of five companies, paying up to an additional $1.1 billion.
Last month, BP paused Red Sea shipments. Meanwhile, QatarEnergy, the second largest exporter of liquefied natural gas (LNG) in the world, ceased sending tankers through the Red Sea Monday, Reuters reported.
About 12% of total global seaborne oil trade travels through the Red Sea. U.S. crude oil prices traded below $71 per barrel Tuesday while U.S. natural gas prices sank more than 8%.
Oil Stocks
Dorian LPG gained ground early before falling 3.6% to 40.99, slipping below its 50-day line, during Tuesday's market action. The Connecticut-based company operates a fleet of 25 vessels transporting liquefied petroleum gas (LPG). Dorian LPG customers include Exxon Mobil, Chevron and other energy giants.
Oil stock Shell fell 3.2% to 61.75, undercutting the stock's 200-day moving average for the first time since June.
BP edged down 1.7%. U.S. supermajor Chevron dropped 2.4% and Exxon Mobil angled 2.3% lower.
Energy shipping stocks Scorpio Tankers lost 2.8% while Frontline edged up 0.6% Tuesday.
Meanwhile, non-energy shipping stock ZIM Integrated Shipping surged 6% early before closing down 1%. Golden Ocean Group advanced 3.9%.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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