Oil & Gas

Oil flows through the Cape of Good Hope route, situated at the southernmost point of Africa, have surged by approximately 50% in the initial five months of 2024 compared to the average of 2023, attributing this increase to shifts in global shipping patterns.

The escalation of Houthi attacks in Yemen since late 2023 prompted commercial ship operators to seek alternative routes, circumventing congestion at oil transit points in the Bab al-Mandab Strait and the Red Sea.

According to a recent report from the Washington-based Energy Research Unit, crude oil and oil derivatives transported via the Cape of Good Hope route surged to 8.7 million barrels per day from January 2024 to May 2024, a notable increase from the 5.9 million barrels per day average in 2023.

A significant portion of this uptick in traffic is driven by heightened shipments of petroleum products, as geopolitical tensions in the Middle East encourage rerouting through the Cape of Good Hope.

Middle Eastern oil producers, including Saudi Arabia and Iraq, have redirected more crude oil shipments towards Europe via the Cape of Good Hope route, accounting for 15% of the overall rise in oil trade between the 2023 average and the first five months of 2024, as outlined in a report by the US Energy Information Administration. This shift has surpassed volumes transported through the traditional Suez Canal route.

Simultaneously, refineries in Asia and the Middle East have bolstered exports of petroleum products to Europe, opting for westward routes around the Cape of Good Hope, thereby contributing 29% to the overall surge in oil trade through this route.