August 10, 2024: The blockade by Yemen Houthi rebels of the Suez Canal has forced tanker companies to change their routes, and the types of ships used to carry petroleum products from the Middle East to markets in Europe. Before the Houthis became a problem in the Red Sea, many of the ships carrying cargo from East Asia to Europe were Suezmax cargo and tanker ships that were named for being the largest ships able to fit through the Suez Canal. With the Suez Canal less attractive to use because of the continuing Houthi attacks, shipping companies have switched to the use of larger ships that must travel around southern Africa to reach their customers in Europe.

This meant a lot more business for VLCC (Very Large Crude Carrier) of 300,000 deadweight tons (DWT) ships. This is the largest size tanker that can use the Straits of Malacca to carry oil from the Persian Gulf to East Asia. Now some of these ships are moving cargoes from the Persian Gulf around the southern tip of Africa to European markets. These ships haul over two million barrels (about 290,000 tons) of oil per trip. These ships are larger than the biggest American aircraft carriers, such as the Nimitz class which are 110,000 tons displacement and nearly 354 meters (1,100 feet) long.

The major difference between merchant vessels and warships is what equipment they have. Merchant ships are quite basic and plain. A 300,000 DWT VLCC is about the same size as a Nimitz class carrier but costs only $140 million versus over $4 billion for the carrier. It costs more to run a carrier for one year than the VLCC costs to build. Part of that has to do with crew size, with the carrier having a hundred sailors for every one sailor needed to run the VLCC. A VLCC is highly automated and the crew size is usually under fifty sailors and officers. Nimitz class carriers have crews of about 4,500 officers and sailors.

The United States is less of a factor in the tanker business because the Americans are the largest oil producers and refiners in the world. The United States is able to produce, refine and consume 90 percent of the petroleum-based fuels needed in North America. There is still a small amount of oil imported to the United States and exported to Europe because these two regions often require different types of petroleum products due to current events or changes in local conditions. Another factor is that Middle Eastern oil producers have massively increased their oil refining operations over the last two decades and most of the liquid exports are now refined products rather than crude oil.

The major export market for petroleum based products is Europe. Next to the United States, Europe is the largest consumer of petroleum products. Unlike the U.S., Europe has not developed its own petroleum transport business. Another key factor is that China is currently the largest producer of most types of seagoing transports. China has to import a lot of food and fuel to feed its population and keep its industries going. This is a major difference between the largely self-sufficient United States and the import dependent China. These two nations were not directly affected by the Houthi violence. Indirectly the demand for VLCC ships to move cargoes around Africa rather than through the Suez Canal did require some adjustments in the worldwide shipping market. Because there are so many tanker and cargo ships at work, this disruption was hardly noticed by the markets or the customers. Costs for operators and prices for customers changed very little. The only real loser is Egypt whose revenue from Suez Canal tolls has sharply declined.