Yemen Conflict Threatens Major Trade Route, Risking Global Supply Chain Disruption
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Recent attacks on ships by Yemen's Houthi militants have led major shipping and oil companies to avoid the Red Sea and Suez Canal route. This is a major global trade artery.
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Rerouting ships around Africa increases costs and delivery times. It also risks further supply chain disruption when chains are already strained.
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Oil prices rose almost 2% on Monday in response before falling back. But inflationary risks remain due to higher freight costs.
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The Red Sea/Suez route transports 10-15% of global trade and 30% of container shipments. Europe in particular depends on it for energy and other imports.
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Major shipping firms like Maersk and MSC have already begun sending ships around Africa instead. This could clog up alternative routes.