Maritime Global Trade Roundup – May 23, 2024

Houthis, Russia & Turkey, the Coming Disruption…

Houthi Rebels attacked a tanker that was sailing from Russia to China…didn’t they previously announce that route would be protected? This week’s Maritime Global Trade Roundup has AI-powered insights on the incident, plus: 

• The Houthi-Red Sea paradox: the Houthis have escalated their attacks against merchant vessels since April, after several months in which no attacks were carried out, but there was an 89% increase in weekly area visits in the Red Sea and Aden regions from March 10-May 11 by container vessels owned by the six major carriers. We also look at the recent price hikes. 
• Russia found a loophole to sell its oil to the EU via Turkey. This has implications for maritime risk and we’ve got the details…
• Two AWS experts sat down with Windward’s Co-Founder and CEO to discuss how vertical AI + generative AI will positively disrupt the maritime ecosystem and revealed the differentiator that will enable organization to really reap the benefits. Watch it now.

Why Was a Tanker on the China-Russia Route Attacked?

• U.S. CENTCOM announced on May 18 that the Houthis attacked MT Wind (IMO: 9252967), a Panama-flagged tanker. The vessel was hit, but no casualties were reported.
• Windward’s Maritime AI™ platform shows that the vessel, a 239-meter crude oil tanker, is owned and operated by Greek companies. Based on the vessel’s AIS signal, the vessel was sailing back from the port of Novorossiysk through the Red Sea en route to China.
• Data also shows that the vessel arrived in Russia at the beginning of May and loaded cargo at Novorossiysk, while conducting several dark activities in the Black Sea. The vessel departed the Black Sea on May 7 and on May 13 entered the Black Sea. On May 16, the vessel engaged in dark activity 192 nautical meters (NM) off the port of Hodeidah, Yemen. Based on Windward’s dark/gray fleet report, the vessel appears to be part of Russia’s gray fleet.

• It should be remembered that the Houthis declared that they will not attack vessels sailing from Russia to China and that these vessels would be granted safe passage in the Red Sea. Nonetheless, in the previous months the Houthis mistakenly targeted several vessels carrying Russian oil to China.
• While the vessel does not show any connection to Israel or the U.S., it is possible that the Houthis targeted it due to its ongoing dark activity in the Red Sea, which in the past was a trigger for Houthi attacks against other vessels. 
• The Houthis also declared on May 16 that they will extend their attacks on merchant vessels headed to Israel in the Mediterranean Sea, as well as in the Red Sea.

Did a Promising Respite Juice Red Sea Trade?

• The Houthis have escalated their attacks against merchant vessels since April 2024, after several months in which no attacks were carried out.
• Windward data shows that although lower than the previous year, from March 10 to May 11, 2024, there was an 89% increase in weekly area visits in the Red Sea and Aden Regions by container vessels owned by the six major carriers (COSCO, MSC, CMA CGM, ONE, Maersk, Hapag-Lloyd). It is also interesting to see that between March 10-May 4, 2024, area visits to The Cape of Good Hope by the six major carriers decreased by 23%. It is possible that some of the vessels that sailed through The Cape of Good Hope changed their routes to sail through the Red Sea. This emphasizes that there was a possible improvement in maritime trade via the Red Sea and Suez Canal during March-April 2024.
• Windward’s Ocean Freight Visibility (OFV) Port Insights capability shows the improvement in shipping via the Suez Canal. Data illustrates that the month-to-month change in TEU capacity of all vessels that berthed at the ports that are included in the Suez lane, from Europe to China/East Asia, increased by 13.6% in April 2024 compared to March 2024.
  
  This shows a  larger volume of trade conducted between North Europe and East Asia (FBX12). Data also shows that the total number of port calls by container vessels taking the route between Europe to East Asia (FBX12) increased by 15% in April 2024 compared to the previous month, showing that the vessels might have been able to operate more freely along the path between POL and POD.

• However, data shows that weekly area visits to the Red Sea by container vessels of the six major carriers between May 11-18, 2024 decreased by 35%. It should be noted that during this time several attacks have been carried out by the Houthis against three MSC vessels that were sailing in the area.

_{Area visits in the Red Sea by container vessels owned by the six major carriers, January 1, 2023-May 18, 2024}

• While data shows a possible improvement between March-April 2024, it is possible that due to the recent escalation of the Houthis, the volume of trade will be further negatively affected.
• At the beginning of the Red Sea crisis, due to container vessels engaging in route deviations from the Red Sea, prices in shipping and insurance increased drastically, affecting global trade. Recently, open sources showed that because of the renewal of Houthi attacks, freight prices increased in recent weeks by 30%. As shipping stakeholders adapt yet again to the new situation after the improvement during March-May 2024, it is expected that prices, both for shipping and insurance, are expected to further increase. In turn, organizations will need to re-evaluate their operations between East Asia and Europe as the “new normal” situation continues. 

Russian Oil Trade with the EU via Turkey

• Research by the Centre for Research on Energy and Clean Air (CREA) and the Center for the Study of Democracy (CSD) suggests that Russian oil is arriving to the EU via Turkey. According to the research, Russia sells its oil by using a possible “loophole,” blending oils from several sources. It is then labeled by the EU as non-Russian.
• This practice is not new. In January 2024, open sources pointed out that Russian crude oil was arriving to Turkey’s Dörtyol Terminal, located close to the border of Turkey and Syria, and sold to other vessels as non-Russian oil for trade with the EU.
• Based on Windward data, there was a 700% increase in port calls in Turkey by crude oil tankers previously engaging in dark activity in the Black Sea between January-April 2024. Also, April shows the highest number of port calls by these vessels since November 2023. It should be noted that no similar port calls were seen in the system in April 2023.
• 94% of these port calls were classified in the Windward Compliance System as risky in relation to Russia.

_{Port calls in Turkey by crude oil tankers after conducting a dark activity in the Black Sea, June 2023-May 2024.}

• Windward data shows that these vessels conducted their port calls in Turkey, mostly at the terminals of Dörtyol, Altinova, and Aliaga. It should be noted that in the past, open sources pointed out that the port of Aliaga was a known destination for Russian oil.

• Contrary to this trend, the direct arrival of vessels from Russia to Turkey did not show any signs of increase (they remained largely the same). It is possible that vessels that are selling Russian oil in Turkey are trying to hide their previous location to sell sanctioned oil. By using Windward’s platform, it is possible to detect these vessels and gain a better understanding of oil flow from Russia to the EU.