- Cyprus Shipping Chamber warns that persistent Houthi attacks in Red Sea shipping lanes could have a substantial impact on economies, affecting daily living and business operations.
- The disruptions, prompted by geopolitical tensions, have already led to rising freight prices and diverted shipping routes, raising concerns about global supply chains.
In a recent statement, the Cyprus Shipping Chamber expressed deep concern over the sustained attacks by Yemen’s Houthis on vessels utilizing Red Sea shipping lanes. The chamber warns that these disruptions could have a “substantial” impact on economies, potentially triggering a domino effect on prices and supply chains.
Critical Trade Route Disruptions
Houthi attacks have particularly targeted a vital trade route, crucial for oil transport, as vessels navigate from the Red Sea to access the Suez Canal. The severity of these attacks has compelled some shipping lines to reroute vessels, opting for longer paths and raising the specter of significant supply bottlenecks.
Implications for Daily Life and Business Operations
“For us, the primary thing is for this issue to have been resolved, yesterday,” emphasized Thomas Kazakos, the Director General of the Cyprus Shipping Chamber. He highlighted the potential consequences of these disruptions, especially for countries heavily reliant on raw materials, gas, grain, and pharmaceuticals. He stressed that such impacts would extend beyond the realms of business operations, permeating into daily life, and creating a multiplying effect on various sectors.
Rising Freight Prices
Adding to the concerns, Kazakos noted that freight prices had already experienced an upward surge, indicating the immediate economic fallout from the escalating situation in the Red Sea.
International Obligations and Urgent Resolution
The Cyprus Shipping Chamber, representing approximately 200 major shipowning, ship management, chartering, and shipping-related companies, emphasized the urgency of resolving the issue. The Houthis, an Iran-aligned group, have explicitly targeted ships linked to Israel, irrespective of their actual connections. Kazakos called on states to fulfill their obligation to provide protection to international shipping, emphasizing the broader implications on world trade, economies, and societies.
Cyprus Shipping Industry’s Stake
Cyprus, with the third-largest shipping fleet in the European Union after Malta and Greece, has a significant stake in the global shipping landscape. The industry group’s concerns underscore the potential far-reaching consequences of the Houthi attacks on international trade routes.
International Cooperation for Resolution
Kazakos urged for swift international intervention to address the escalating situation, emphasizing the paramount importance of resolving the issue promptly. As geopolitical tensions in the region persist, the global shipping industry is grappling with the multifaceted challenges posed by the Houthi attacks on vital shipping lanes.
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Source: Reuters
