Oil & Gas Report for May 2024

FD&A Department
Jun 2, 2024
3 min read

Updated: Jun 7

Here’s the MBIEC‑style Oil & Gas Report for May 2024, spotlighting maritime disruptions, trade lane adjustments, regulatory updates, and industry responses:

1. ⚓ Escalation in Red Sea & Adjacent Waters

Houthis broaden attack scope (Phase 4)

In early May, Houthi leader Abdul Malik al‑Houthi declared that ships linked to Israeli ports or owned/operators them would be targeted—pressuring global carriers reuters.com +15washingtoninstitute.org +15reuters.com +15.
Key May incidents:
- May 7: Anti-ship missiles possibly hit MSC Gina and MSC Diego near Aden/South Red Sea—no confirmed damage reuters.com +2en.wikipedia.org +2en.wikipedia.org +2.
- May 18: Greek-owned, Panama-flagged oil tanker MT Wind struck by missile off Mokha wwwcdn.imo.org +6en.wikipedia.org +6cbsnews.com +6.
- May 24: Attacks claimed on Yannis (Red Sea), Essex (Mediterranean), and MSC Alexandra (Arabian Sea); U.S. Central Command confirmed two ballistic missiles in the Red Sea with no impact en.wikipedia.org +8reuters.com +8en.wikipedia.org +8.
- May 28: Marshall Islands-flagged bulk carrier Laax hit in Red Sea reuters.com +8en.wikipedia.org +8en.wikipedia.org +8.

Trade lane fallout

These attacks intensified concerns over all vessels linked—not just Israel-bound—leading to further rerouting around the Cape of Good Hope. Increased voyage duration and surge in war-risk premiums persisted.

2. 🛡️ Military Response & Geopolitical Retaliation

U.S.–UK strikes in Yemen

A series of U.S. drone strikes on Houthi UAS systems (May 2, 13, 15, 22, 24) preceded joint U.S.–UK airstrikes on May 30 targeting missile sites, command centers, and a Houthi vessel in Sanaa and Hodeidah en.wikipedia.org +1en.wikipedia.org +1.

Post-strike shipping risks

Houthi threats intensified after May 30's strikes, prompting further shipping rerouting. Naval escorts and no-transit advisories remained active until reassessment of the security environment.

3. 🧭 Panama Canal & Alternative Routing

With Red Sea risks elevated, vessels continued to avoid the Suez route, increasing reliance on the longer Cape path.
Panama Canal remained constrained by drought and prioritization of container vessels, limiting relief even as rerouting demand grew.

4. 🏛️ Regulatory & Environmental Progress

MARPOL amendments effective May 1, 2024

New MARPOL provisions entered into force, enhancing environmental discharge standards and stricter oil/sludge handling protocols washingtoninstitute.org.

IMO GHG measures gaining ground

IMO’s MEPC‑81 session in May advanced mid-term GHG regulations, reinforcing EEXI/CII and progressing global fuel standards and carbon pricing frameworks .

5. 🛢️ LNG Trade & Alternative Fuel Momentum

LNG dark-fleet activity

May saw intensified “dark-fleet” LNG carrier port calls outside Russia, a 1,600% surge between Oct 2023–Apr 2024—raising compliance and sanction risks windward.ai +1dnv.com +1.

Alternative-fuel shipbuilding uptick

DNV data confirmed a boom in LNG and alternative-fuel vessel orders in 2024. May tracked sustained momentum as new dual-fuel vessels came online .

6. ⚙️ Industry Adaptations & Freight Dynamics

Voyage planning sharpened: Operators increasingly used real-time intelligence, adjusted routes, and lined up naval escorts for risky transits.
Freight rates rose: Tanker spot rates climbed due to rerouting and risk premiums.
Port pressure: Singapore and Rotterdam saw increased bunker demand and vessel throughput as traffic shifted.
Compliance tech adoption: Carriers invested in hull coatings, emissions monitoring, and readiness for new GHG and MARPOL enforcement.

🔍 Strategic Takeaways for MBIEC

Focus Area	Risks	Opportunities
Security / Routing	Expanded Houthi targeting, military strikes	Enhance risk modeling, secure war-risk coverage, optimize alternative pathways
Environmental Regulation	New MARPOL rules, IMO GHG mandates advancing	Support compliance retrofits, advisory on operation/monitoring technologies
LNG & Alternative Fuels	Dark-fleet LNG risk; growing alternative-vessel pipeline	Guide clients on clean fuel transition, sanction assurance, fuel logistics
Freight/Port Pressure	Freight increases, port congestion	Offer predictive analytics, port collaboration strategies

✅ Summary Insights

Houthis entered Phase 4, targeting Israeli-linked shipping in May—wider vessel threat range and missile/drone strikes across seas.
Coordinated U.S.–UK military strikes came late May, further destabilizing transit security.
Rerouting persisted, driven by Red Sea risk and Panama constraints.
Regulatory gains: MARPOL enhancements and IMO’s GHG mid-term measures gained traction.
LNG and alternative-fuel momentum continued, with noted sanction-conscious dark-fleet activity and vessel ordering booms.
Maritime resilience strategies: carriers turned to dynamic routing, compliance tech, and higher war-risk coverage.

📌 MBIEC Client Recommendations

Intensify voyage risk assessments, integrating threat phase analysis and prompt route adjustments.
Fast-track retrofit and compliance readiness, especially for MARPOL and upcoming GHG mandates.
Highlight LNG and alternative-fuel exposure, ensuring sanction-proof logistics amid dark-fleet concerns.
Deploy freight and port operations analytics, helping clients manage spike impacts and adjust strategically.