How do attacks in the Red Sea affect international trade?

Due to major maritime corporations rerouting their routes away from the Red Sea, there is a significant disruption to global supply networks. Due to attacks on commercial vessels by Houthi rebels in Yemen, many businesses have chosen to stay away from one of the busiest maritime channels in the world. Although it’s unclear if all of the attacked ships were genuinely going to Israel, the Houthi organization has stated that it supports Hamas and that it is attacking ships that are traveling there. In reaction to the attacks on shipping, US and UK naval troops in the Red Sea have now commenced airstrikes against Houthi rebel sites in Yemen.

Since the Israel-Hamas war began in October, the Houthis have increased the intensity of their strikes. The gang, supported by Iran, has been deploying drones and rockets against foreign-owned ships that are passing through the Bab al-Mandab strait, a 20-mile-wide passage that divides Yemen on the Arabian Peninsula from Eritrea and Djibouti on the African side. This route is typically used by ships traveling northward from the south to access Egypt’s Suez Canal.

However, a number of the biggest shipping companies in the world, such as Mediterranean Shipping Company and Maersk, have redirected ships to a far longer route that goes around Africa’s Cape of Good Hope and then up the west side of the continent due to the attacks and the prospect of additional assaults. Additionally, BP has stopped sending any oil across the Red Sea, citing a “deteriorating security situation” as the reason. The longer routes cost businesses millions of dollars and add at least 10 days to shipping delays.

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