The conflict between Israel and Hamas in Gaza has taken a concerning turn with the recent escalation involving Yemeni missiles. The strategic Bab al-Mandab strait, a vital maritime route, has become a focal point for attacks, leading major shipping companies to reroute vessels and suspend operations in the Red Sea.
Escalation in the Red Sea
Yemeni Houthi rebels, backed by Iran, have intensified their attacks on ships transiting the Red Sea. In response to perceived support for Israel, the rebels have targeted vessels bound for Israel, triggering a series of suspensions by global shipping giants. The situation has escalated to the point where all diverted their ships, raising concerns about the security of this crucial waterway.
Implications for Global Trade
The Bab al-Mandab Strait, known as the “Gate of Tears,” is a significant channel for global trade, with approximately 10% of world trade passing through it annually. The suspension of operations by major shipping companies is likely to have severe implications, affecting supply chains, increasing costs, and ultimately impacting consumers. The increased security risks in the region also contribute to rising crewing, fuel, and insurance costs, which could further exacerbate the economic fallout.
As tensions escalate and major shipping routes are disrupted, the consequences are not limited to the geopolitical arena. The economic ramifications are substantial, with the conflict in the Red Sea sending shockwaves throughout the global trade network.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: BBC
