The attacks by Yemen’s Houthi militias on merchant ships sailing through the Gulf of Aden and the decision of shipping companies to avoid the Suez Canal have alarmed many economists. For now, the consequences are higher expenses and delayed deliveries.
AAE | EITB MEDIUM
The attacks carried out in recent weeks by Yemen’s Houthi rebels on merchant ships bound for the Suez Canal, passing through the Al Badeh Strait and the Red Sea, have forced maritime transport companies to take an alternative route through South Africa, a much longer route. and more expensive route.
The consequences They are already starting to be noticed in the global economy. On the one hand, the delivery of these goods has been delayed because to complete this route it will take another 15 to 20 days. On the other hand, the increase in energy costs has tripled maritime transport rates on those routes. Economist Niko Cuenca explains that for some Basque companies, freight rates have increased from 2,000 to 2,500 euros to 7,000 euros.
The attacks began in mid-December and have been recorded in both the Strait of Hormuz and Bab al-Mandab. The Houthi rebels have announced that their aim is to punish Israel and its allies for their war against Hamas and the humanitarian disaster in Gaza. More than 20 ships have been attacked since then, and the US-led military alliance in the area claims to have prevented more.
For him Suez Canal, through which between 12 and 15% of merchant ships sail of the planet, 25% if we talk about ships that transport containers. A large part of the products that China, ‘the factory of the world’ in the words of Niko Cuenca, exports, do so in containers by sea and pass through here.
In fact, China is the third largest supplier to the Basque Autonomous Community (after the EU and Brazil). The latest ECOMEX report estimates imports from the Asian country at 178.1 million and the main product is electric batteries and their components. But raw materials such as rubber – which Michelin factories need and which have had to stop production – and steel, plastic and other parts for the automotive industry also come to our country from Asia.
Inflation and interest rates
However, it is not only trade with the Far East that has been affected. It should be noted that a large part of the oil and gas that comes from countries such as Saudi Arabia, Iran or Iraq comes from this area and is transported by sea. The oil price has not risen much at the moment because the OPEC countries still have high production. However, Niko Cuenca warns against this when ‘the conflict becomes entrenched and expands With the intervention of the United States and Iran, the consequences could be much more serious significantly increase oil and gas prices.
It should also be taken into account that the other major point of world trade, the Strait of Panama, is experiencing delays due to drought and lack of water. As a result of all this, the prices of products worldwide can increase significantly and remain unchanged over time.
The alarm bells of economic specialists have been activated because most countries were on track to keep inflation under control after the crises of the pandemic and the war in Ukraine, but the situation could be reversed if this situation of insecurity persists over time, forcing central banks to raise interest rates again.
Source: EITB
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
