Oil prices volatile after latest attack on shipping container in the Red Sea
Two of the world’s largest container ship operators have extended diversions from the Red Sea following an attack on a vessel at the weekend that has been blamed for renewed oil price volatility.
On Sunday, Maersk suspended sailings near or via the Suez Canal after one of its giant carriers, the Maersk Hangzou, was targeted by Houthi militants – the latest in a string of attacks on shipping vessels since November.
US military helicopters sank three boats, killing 10 militants, after receiving a distress call in the early hours of New Year’s Eve.
The response was part of a pledge last month involving several naval powers, including Britain, to protect international shipping in the area after rebels in Yemen said they would target any vessels seen to be serving Israel.
The Iranian-backed Houthis are also aligned to Hamas, the group that attacked Israel in early October sparking a war that has threatened to escalate more widely in the region.
“An investigation into the incident is ongoing and we will continue to pause all cargo movement through the area while we further assess the constantly evolving situation,” Maersk said in a statement.
“In cases where it makes most sense for our customers, vessels will be rerouted and continue their journey around the Cape of Good Hope.”
Maersk was understood to have had more than 30 container vessels ready to sail through Suez via the Red Sea.
Its decision followed hot on the heels of a similar move by rival Hapag-Lloyd.
The German firm said earlier on Tuesday that it would continue to divert its vessels away from the Suez Canal and send them via the Cape of Good Hope until at least 9 January.
The world’s fifth-biggest container liner said it would decide then whether to maintain that diversion.
It has been in place since one of its ships was targeted off the coast of Yemen on 15 December.
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The Suez Canal accounts for roughly a third of the world’s container ship journeys.
The continuing diversions add up to two weeks to passages from Asia due to the need to circumnavigate Africa.
Disruption to date has raised insurance costs, shipping fees due to higher fuel and crew costs – costs that can be expected to be passed on down the supply chain in the coming weeks and months.
The attack on the Maersk liner was reflected when financial markets opened for the first time after the New Year holiday.
Brent crude oil was trading 2% higher at $78 (£62) a barrel at one stage.
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Market analysts said the potential for wider disruption to Middle East supply was firmly on traders’ minds.
“The oil price may be affected by the escalation … in the Red Sea over the weekend and the peak demand season during China’s spring festival,” Shanghai-based CMC Markets analyst Leon Li said, referring to the Lunar New Year holiday in early February.
However, oil prices were later flat on the day when US markets opened as investors’ expectations around interest rate cuts this year fell back, holding oil price gains in check.
A stronger dollar also weighed on prices.
An influential committee of MPs is seeking COVID-19-style financial support for Jaguar Land Rover as it tries to recover from a cyberattack.
After a week of plant closures, the Committee for Business and Trade has written to the chancellor, asking her what is being offered to the carmaker “to mitigate the risk of significant, long-term commercial damage to affected firms”.
The 34,000 UK workers of Jaguar Land Rover (JLR) are to remain at home until at least next week after a cyberattack discovered last week halted operations.
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Staff are still being paid from JLR sites in Halewood, Merseyside, and Solihull and Wolverhampton in the West Midlands, but the entire economy around the West Midlands is affected.
JLR suppliers Evtec, WHS Plastics, SurTec and OPmobility have had to temporarily lay off roughly 6,000 staff.
Operations could be disrupted for “most of September” or worse, according to a report from The Sunday Times.
On Thursday, Business and Trade Committee chair Liam Byrne wrote to Chancellor Rachel Reeves, saying: “Firms across the supply chain are now warning the committee of disruption to both upstream and downstream businesses.
“This disruption, we are told, may imminently pose very significant risks to cashflow.”
Intervention, akin to the emergency steps taken to secure British Steel production, is suggested by Mr Byrne to “protect sovereign areas of strength in the UK’s industrial, scientific and technological base”.
A group of English-speaking hackers claimed responsibility for the JLR attack via a Telegram platform called Scattered Lapsus$ Hunters, an amalgamation of the names of hacking groups Scattered Spider, Lapsus$ and ShinyHunters.
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Four arrested over M&S, Co-Op and Harrods cyber attacks
Scattered Spider, a loose group of relatively young hackers, were behind the Co-Op, Harrods and M&S attacks.
Four people were arrested for their suspected involvement in the April attacks and have been bailed.
The Marks & Spencer (M&S) executive responsible for its technology function is leaving the retailer months after a devastating cyber attack which disrupted its systems at a cost of hundreds of millions of pounds.
Sky News has learnt that Rachel Higham, M&S‘s chief digital and technology officer, is leaving the company.
A former WPP and BT Group executive, Ms Higham was hired by M&S early last year.
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Her departure was announced in an internal memo circulated on Thursday.
In it, the company said she was “stepping back from her role”.
“Rachel has been a steady hand and calm head at an extraordinary time for the business, and we wish her well for the future”.
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The April cyber attack on M&S, which was conducted by a group called Scattered Spider, brought its online operations to a halt, underlining the growing threat posed by such incidents.
Its click-and-collect service is now back up and running, and the retailer expects part of its costs to be covered by insurance.
M&S said early last month that it was not looking to replace Ms Higham following an enquiry from Sky News.
It was unclear who would succeed her in the role or whether she would be eligible for a payoff.
An M&S spokeswoman confirmed on Thursday that the memo was genuine but refused to comment further.
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