Global maritime trade is facing major disruption due to the situation in the Red Sea, which involves Yemen’s Houthi rebels, the United States (U.S.) and the United Kingdom (UK).
The Red Sea conflict, mainly driven by the Iran-backed Yemeni Houthi rebels protesting at Israel’s actions in Gaza, is continuing to heat up, with several more attacks on commercial ships from various countries.
A number of shipping companies, such as Maersk, MSC, and Hapag-Lloyd, have temporarily halted sending their shipping containers through the conflict zone, forcing ships to go around South Africa, a longer and more expensive route.
It is possible to wait months for a security pass
Vincent Clerc, CEO of the Danish shipping giant Maersk, told the Financial Times that the disruptions could last for months and could even further fuel global inflation.
“It is unclear to us whether we are talking about re-establishing safe passage to the Red Sea in a few days, weeks, or months…That could potentially have quite significant consequences for global growth,” Clerc said.
The U.S. and the UK are retaliating against the Houthi attacks
It should be noted that recently the UK and the U.S. launched airstrikes against Houthi targets in Yemen, targeting more than a dozen locations so far, including facilities for missiles and drones.
Yesterday, they said that their patience is at an end, but the Yemeni Houthis are determined to oppose everything that can be linked to Israel.
Oil prices reacted sharply to these strikes, with Europe’s benchmark Brent crude jumping more than 3 percent on Friday afternoon, surpassing 80 dollars per barrel on ICE Futures Europe. West Texas Intermediate crude also rose more than 3 percent to more than 75 dollars per barrel.
A new report by the Kiel Institute for the World Economy points out that global trade in the Red Sea fell by almost 1.3 percent between November and December, due to the Houthi attacks. The number of containers that normally travel in the area fell by almost 70 percent.
This has led to a significant increase in transport times and transport costs between East Asia and Europe, as several containers have to find alternative routes, often even around the African continent.
Several countries also took a hit to their imports and exports, with Germany seeing exports fall by 1.9 percent and imports by 1.8 percent.
In the European Union (EU), exports fell by 2 percent, and imports by 3.1 percent. The U.S. recorded a fall in exports of 1.5 percent and a fall in imports of 1 percent, although the country is somewhat less dependent on the Suez Canal and the Red Sea than the EU, Klix.ba writes.
E.Dz.
