Of all the possible consequences of the conflict in Gaza, the most disturbing for the Global economy has not come from Lebanon neither from Syria nor from Iran. She has done it from the poorest, most remote and unexpected corner of the region, a country devastated by war and installed in a fragile ceasefire. Since last November 18, the Houthi rebels of the Yemen they have attacked two dozen cargo ships at the doors of Red Seaactions that are framed in their support for the Palestinians of the Strip and that they promise to maintain until the conflict ends. Israeli assault. Their attacks have disrupted traffic along one of the most important routes for the world maritime trade. Costs are rising, while the patience of USA and some of his allies. The risk to a expansion of war is trading higher again, despite the fact that neither party seems interested in a direct confrontation.
85% of world trade passes through Seaway and 15% does so through the Red Sea. A tongue of warm waters that communicates the Mediterranean with the Indian Ocean through the Suez Canal in the north and the strait Bab al Mandeb In the south. Through that sea – essential to shorten transport times between Europe and Asia— travel 8% of grain worldwide, 12% of Petroleum transported by sea and 8% of the Liquid gas. But now it is once again a sea of pirates, a high risk route harassed by Iran’s allies in Yemen with speedboats, drones and cruise missiles. The Houthis maintain that they are only targeting the merchants bound for Israel or linked in their ownership to the Jewish State, but the capital of the shipping companies is usually quite diffuse and several companies attacked claim to have no relationship with Israel.
“This is a problem for Europe and it is a problem for Asia,” John Stawpert recently said from the International Chamber of Shipping, the largest maritime trade association in the world. Not in vain, 40% of commercial exchanges between both continents transit in containers through the Red Sea . From automobiles, footwear either electronics to raw materials such as Rubber or the Palm oil. “It has the potential to have a huge economic impact“, he added in an interview with Euronews. To get there, however, the crisis would have to last for many months, according to experts.
Alternative route through the Cape of Good Hope
At the moment, a dozen large international companies have chosen alter your routes to avoid the Bab al Mandeb Strait and potential Houthi attacks or kidnappings. A list that includes many giants in the sector, such as the Danish Maersk or the German Hapag-Lloydas well as oil companies such as B.P.. At the end of December, the traffic through the strait had been reduced by 40%, according to Bloomberg. The alternative route is considerably longer and more expensive, but also safer. Forces to circumnavigate the African continent through the Cape of Good Hope (South Africa), which adds a minimum of 10 days to sailing.
“The freight prices have become more expensive and also insurance premiumsbut it is not going to have a very big impact in the short term,” he assures Jordi Rosell, professor of Economics at the Autonomous University of Barcelona. “This could contribute something to the inflation spikealthough for the moment it will be marginal because freight rates are still very cheap.” According to the consulting firm Freightos, the price of transporting a container from China to the Mediterranean increased by 44% in December. In the long run, the extra costs should be passed on to the consumer.
The other problem with the South African route is the delays in deliveries, which are beginning to affect some large companies. The factories of Michelin in Spainwhere it has four production centers and 7,000 workers, are deactivating some work shifts due to delays in receiving asian natural rubber, used for the manufacture of its tires. “There will be distortions for companies in the management of their stock. If what arrives are components or raw materials, it could create delays in production,” says Professor Rosell. In any case, the experience during pandemicwhich severely disrupted the supply chains, should help minimize disruption.
Historical background
In historical terms, however, the Houthi sabotage as a pressure measure to stop the war in Gaza are little compared to the Arab embargo of 1973when the OPEC stopped crude oil production and stopped exporting oil to Israel’s Western allies for their support of the Jewish state during the Yom Kippur Waran embargo that lasted for months, triggered inflation in countries like the US and ended up causing a severe economic crisis.
Six years earlier, during the War of the six days (1967), Egypt He chose to close the Suez Canal and did not reopen it until eight years later. Those kinds of drastic measures are neither available now nor expected. Beyond the rhetorical tantrum, some withdrawals of ambassadors and the temporary suspension of the normalization of relations with Saudi Arabia, he Arab world has not taken no punitive measures against Israel, attacked by Hamas en masse on October 7. And that his counterattack has left to date 23,000 dead in Gaza or a level of destruction that, according to UN Humanitarian Affairs chief Martin Griffiths, has made the Strip a “uninhabitable place.”
Washington-led coalition
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The US, however, seems willing to end the disturbance of the seas. The Biden Administration has assembled a coalition of 13 countries, which finally has not entered Spainwhich has been patrolling the southern mouth of the Red Sea for some weeks and which last week launched a sort of ultimatum against the Houthis, with whom he has already had some run-ins. In a statement, he warned that the pro-Iran militia will have to “take responsibility for the consequences” of their attacks, described as “illegal, unacceptable and deeply destabilizing.” Surely aware of the historically drawn red lines According to Washington, the Houthis are not attacking oil tankers.
But at the same time Washington is trying to prevent the war in Gaza from spreading to the Lebanongiven the express wishes of some Israeli leaders and soldiers to expel Hezbollah from the vicinity of its border and stop the daily attacks on its territory. So a major offensive in Yemen could disrupt those same efforts and bring the possibility of a total war in the region between Israel and the US on the one hand and Iran and its satellites on the other, the greatest threat that has plagued the region since October 7.