ALEX BRUMMER: Terror tides rock the Red Sea and threaten to scupper the global recovery

Saudi Arabia and its arms suppliers, including BAE Systems, have taken endless flak for support of the Yemen government in seeking to defeat the Houthi rebels.

Critics may need to revise their views as Christmas fuel prices jump from recent lows at the pumps amid increasing anxiety about Houthi attacks on shipping in the Red Sea.

The threat to freight is far from a full-blown crisis but with 15 per cent of international trade passing through the Suez Canal, the threat to global commerce, supply chains and the energy market is very real.

BP and the merchant shipping line Maersk have diverted sailings from the canal to Africa and the Cape of Good Hope.

Freight rates are rising and Lloyd’s of London syndicates are designating the Red Sea a ‘high-risk zone’.

Seized: The Galaxy Leader cargo ship was seized by Houthi rebels in the Red Sea on December 5.  In recent days the Houthis have fired missiles at ships passing the Yemen coast

Watchers of the current hyper-emotional BBC series Vigil might imagine all this is being stage managed by Britain’s military to bolster arms sales. 

But with Ukraine under attack and Europe stiffening its defences, there is no shortage of orders for advanced weapons and ordnance at present.

In recent days, the Houthis have sought to seize vessels and fired missiles at ships passing the Yemen coast on their way towards the critical Bab al-Mandab gateway to Suez. 

Houthi attacks are designed to show sympathy with Hamas. The arc of radicalism across the Middle East largely emanates from Iran.

As tension in the Mid East has escalated, the UK moved rapidly to tighten sanctions on Iran in the last few days. 

We know, however, from the Binance cryptocurrency scandal, how easy it is for terrorists to move funds using unregulated channels.

The current conflagration in the Red Sea is not comparable in scale to the demolition of just-in-time supply chains caused by Covid-19, the inflation fallout and ballooning Western debt levels which followed. 

Nor is it anywhere near the scale of the diversion of Russian energy supplies to Europe. In spite of the global rise in interest rates in 2023, the world navigated choppy waters reasonably well.

The US economy powered away, and amid dire forecasts the UK, so far, has not fallen into the oft predicted recession.

Nevertheless, recovery across the globe is tenuous and a lengthy disturbance to global tanker deliveries and freight could become the straw which broke the camel’s back.

New look

The best companies usually have an internal succession plan although it hasn’t been wholly successful at BP.

With the critical exception of Bob Dudley, the Texan who navigated the British group out the Deepwater Horizon crisis, BP has not had a great deal of luck with its bosses.

Lord Browne, the ‘Sun King’, left under a cloud in spite of engineering two bold US takeovers. 

Successor Tony Hayward sailed off into the sunset after Deepwater Horizon. Bernard Looney had all the right green ideas but his personal life cost him his job and a potential £34million.

It is a requirement for the boards of international giants to look at external candidates. But at Big Oil, which is truly tribal, insiders are preferred. 

The obvious choice for chairman Helge Lund would be interim-chief executive Murray Auchincloss, the former finance director. 

He would probably head for the hills if passed over. Whether Auchincloss has the vision to steer BP to a carbon-free future while keeping the dividends and buybacks going will be the main issue for Lund and the board to consider.

It is intriguing that two women executives, head of trading and shipping Carol Howle and Emma Delaney, who leads on customers and products, are in the frame.

There has been no female chief executive among the oil majors. Given the hash made by male predecessors, the time for change is ripe. One imagines that non-executive Amanda Blanc, who runs Aviva, would be among those to support an oil woman.

Broken record

Chaos again at Hipgnosis, the British pioneer of buying song books and creating a new asset class.

Unfortunately, as deeply knowledgeable as founder Merck Mercuriadis is on the music scene, snapping up artists working at a ferocious pace, he has proved horribly weak on governance. 

The failure to produce trading interim results follows a dispute over the valuation of assets. Why that should be is a mystery. Maybe it is time to put Merck and his creation out of its misery.

Universal, are you listening?

This post first appeared on Dailymail.co.uk