Red Sea attacks on ships pose another threat to an already precarious global economy

Red Sea attacks on ships pose another threat to an already precarious global economy

The New York Times reports:

The wave of attacks against merchant ships in the Red Sea is forcing companies to send ships on longer routes and threatens to hurt an already wobbly global economy.

The Houthis, an armed group backed by Iran that controls much of northern Yemen, have been using drones and missiles to target ships since Hamas attacked Israel on Oct. 7. That has forced some shipping giants and oil companies to avoid the Suez Canal, a development that could hamper global trade and push up the cost of imported goods.

The Suez is a vital artery for container ships and fuel tankers. Goods and fuel from Asia and the Middle East have made their way to Europe and the United States through the passage since it opened in 1869. Britain and other world powers have fought wars and engaged in geopolitical intrigue over the canal, controlled by Egypt now, for more than a century.

About 50 vessels go through the Suez Canal a day, and recent data suggested that, as of Monday, at least 32 had been diverted, said Chris Rogers, head of supply chain research at S&P Global Market Intelligence. He noted that nearly 15 percent of European imports were transported by sea from Asia and the Persian Gulf, most of which go through the Suez.

Peter Sand, chief analyst at Xeneta, a shipping market analytics company, described the problems in the Red Sea and the canal as “a slow-burning disaster that really blew up on the weekend.” He added, “Everybody involved in global shipping, especially with supply chains connected by the Suez Canal, is trying to find out where their goods are, where they are heading.” [Continue reading…]


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