Oil flows through the Cape of Good Hope surged by 50% during the first five months of 2024, compared to the average for 2023.

This sharp increase is mainly due to the attacks launched by the Houthis in Yemen in late 2023, prompting commercial vessel operators to seek alternative routes to avoid bottlenecks at critical oil transit points in the Babel-Mandeb Strait and the Red Sea.

The volume of crude oil and petroleum derivatives flowing around the Cape of Good Hope in both directions rose to 8.7 million barrels per day between January and May 2024, up from an average of 5.9 million barrels per day in 2023.

Middle Eastern crude oil producers, such as Saudi Arabia and Iraq, have ramped up their shipments west to Europe via the Cape of Good Hope, driven by increased European demand and the need to bypass unrest in the Middle East.

The diversion of oil tankers around the Cape of Good Hope has led to a noticeable increase in both shipping costs and transit times. For instance, the journey from the Arabian Sea to Europe via this route takes nearly twice as long as through the Babel-Mandeb Strait and the Suez Canal, imposing an additional burden on global supply chains.

This significant shift in global oil flows highlights the profound impact of geopolitical factors on energy markets. The Houthi attacks in Yemen have caused substantial disruptions to traditional shipping routes, necessitating the adoption of alternative corridors such as the Cape of Good Hope.