Since the outbreak of the current round of Palestinian-Israeli conflict, the Houthi forces in Yemen have intensified their attacks on merchant ships in the Red Sea, and the four international shipping giants, namely Denmark's Maersk Line, Germany's Hapag-Lloyd, Switzerland's Mediterranean Shipping Company and France's CMA CGM Group, have announced the suspension of navigation in the Red Sea region, and the Suez Canal, as the "artery" of global shipping, is at risk of "closing".
The new Suez crisis is threatening the world economy. The British "Economist" weekly published an article on December 16 with this title, saying that the Red Sea is the only way to transport through the Suez Canal, and the closure of this route may lead to a significant increase in costs and even disrupt the global chain. The Red Sea "maritime crisis" could turn the conflict in the Gaza Strip into a global event affecting the world economy.
According to the article, the Bab el-Mandeb Strait between Africa and the Arabian Peninsula connects the Red Sea with the Gulf of Aden and is one of the international shipping arteries, with about 12% of the world's ** traffic and 30% of container traffic passing through the Bab el-Mandeb Strait. But in recent weeks, Yemen's Houthi rebels have begun attacking ships in solidarity with the Palestinians, and it has become a "no-go zone."
The global shipping industry is moving into "emergency mode" due to rising safety risks. Denmark's Maersk Line and Germany's Hapag-Lloyd announced the suspension of the Red Sea route on the 15th, and France's CMA CGM Group and Switzerland's Mediterranean Shipping Company also followed suit and announced the suspension of navigation in the region on the 16th. Together, these four companies account for 53% of the world's container volume.
The surging news also quoted freight forwarders on the 18th as saying that due to the impact of the international situation, COSCO Shipping, Orient Overseas and Evergreen Shipping have verbally notified the suspension of cargo pick-up on the Red Sea route. Ocean Network Shipping has also given verbal notice to suspend cargo handling on the Red Sea route.
Data map: LNG container ship of the French CMA CGM Group Source: AFP.
The Economist believes that until the security situation improves, other shipping companies may follow the international shipping giant's lead and bypass the Suez Canal route.
The article says that the crisis could threaten the world economy, and the long-term "closure" of the Suez Canal route will force merchant ships to detour through Africa, which will take more time and insurance costs will soar, thus significantly raising the cost. As the Suez Canal is Egypt's main source of revenue**, the closure of the route will further exacerbate Egypt's dire economic situation.
The diversion of a large number of merchant ships may also cause chaos in the first chain in the short term. For example, in 2021, the cargo ship "Ever Given" ran aground in the Suez Canal, blocking the canal for 6 days, an incident that once exacerbated the global ** chain crisis.
In addition, if a security crisis in the Red Sea is perceived as a threat to shipping in the nearby Arabian Sea, the economic costs could be even greater, as one-third of the world's seaborne oil passes through the Arabian Sea.
Sue Terpilowski, a shipping expert at the Royal Institution of Logistics and Transport, also pointed out in a previous interview with the BBC that the suspension of the Red Sea route would have a serious impact on inventory levels, costs and the overall dynamics of the chain, with increased crew, fuel and insurance costs likely to be passed on to consumers.
Spain's Vanguardia newspaper reported that according to calculations by California-based transportation company Feixiebo, the diversion route through the Cape of Good Hope will not only make transportation more expensive, but also extend the transportation time by 7 to 10 days.
On November 22, the cargo ship "Galaxy Leader", which was seized by the Houthis, sailed to the Red Sea port Source: Visual China.
In The Economist's view, diplomatic negotiations may help to alleviate the current crisis. Saudi Arabia has agreed to peace talks with Yemen's Houthis, and it is possible that a road map for a permanent ceasefire and an end to the war will be unveiled soon, and a halt to naval attacks could be one of the conditions of the agreement.
Today, a multinational force led by the U.S. Navy is operating off the coast of Yemen in an attempt to prevent the Houthis from boarding ships or firing missiles. In the past few weeks, the United States, Britain and France have all claimed to have intercepted Houthi drones and missiles. The U.S. ** Command issued a statement on the 16th, saying that the U.S. destroyer USS Carney shot down 14 Houthi drones in the Red Sea on the same day.
But the Houthis have proven that there are always missiles and drones that can break through and complete the attack, and there is no better way for the West to respond.
The article says that possible measures include the provision of armed escorts for merchant ships, but US Navy sources bluntly say that such an operation would require the mobilization of a large number of ** and consume a lot of resources. Another alternative is for the United States and Israel to strike directly at the Houthis, but the United States is reluctant to expand its intervention in the Middle East, and Israel does not want a new conflict.
On November 26, the U.S. Navy destroyer USS Carney passed through the Suez Canal Source: Visual China.
So The Economist concludes that more than a thousand kilometres from Gaza, a maritime crisis is unfolding in the Red Sea, which could turn the conflict in the Gaza Strip into a global event affecting the world economy.
Yemen's Houthis are members of the Resistance Front. The group includes Iranian, Syrian, and Lebanese Allah, as well as any anti-Western or anti-Israel militias in the region, with the common goal of countering U.S. and Israeli influence in the Middle East. Since the beginning of the Israeli-Palestinian conflict on October 7, the Houthis have been attacking Israeli and US military base targets.
Yemen's Houthi rebels announced on December 9 that any ship heading for Israel would become a "legitimate target" for the group's armed forces if food and medicine could not enter the Gaza Strip. The group warned that all ships and companies should avoid dealing with Israeli ports due to the safety of maritime navigation.
In addition to maritime targets, Yemen's Houthi rebels continue to launch long-range strikes against targets in Israel. On December 16, the group claimed to have launched a "cross-border drone attack" against multiple targets in the southern Israeli city of Eilat.
Ahmed Rafiq Awad, a professor at Al-Quds University in Palestine, noted that armed groups in Yemen, Lebanon and Iraq are becoming more and more deeply involved in the Israeli-Palestinian conflict. "The Houthi attack on merchant ships in the Red Sea has raised concerns in the United States and other Western countries, and Israel's intention to join forces with other countries to cruise the Red Sea, raising the risk of conflict spillover. ”
The Financial Times commented that the most dangerous scenario would be the outbreak of a full-scale war in the region, involving both the countries of the region and the United States. Russia's Sputnik news agency said on the 17th that the risk of an expansion of the war is rising as the Pentagon begins to consider fighting the Houthis.
This article is an exclusive manuscript of the Observer.com, and it is not allowed to be unauthorized and shall not be allowed.