Gaza Conflict: Red Sea attacks by Houthis disrupting global routes, supply chains

Growing attacks on ships in the Red Sea by the Iran-aligned Yemeni Houthi rebel organisation are causing major international goods companies to reroute around the Cape of Good Hope in order to avoid the Suez canal, so affecting maritime traffic. According to American officials, a number of “projectiles” were fired on Monday at a vessel in the southern Red Sea from area under Houthi control. The Houthi movement claims that its missile and drone assaults on ships in the Red Sea are a reaction to Israel’s invasion of the Gaza Strip. The most recent incident was not immediately attributed to anyone. Industry observers predict that as a result of the major freight firms, such as MSC and Maersk, starting to sail across Africa, expenses and delays will increase over the next few weeks. The quickest maritime route between Europe and Asia is the Suez Canal, which is used by 15% of all ships worldwide. Following the attacks over the weekend, oil firm BP has also temporarily halted all transits in the Red Sea. Beginning on October 7, the fight between Israel and Hamas has rattled the region, including the US and its allies on the one hand and Iran-backed paramilitary groups in the Middle East on the other, raising the possibility of a wider conflict. Tehran, the main adversary of the United States and Israel, has cautioned that creating a task force to guard Red Sea lines would be a mistake, but the attacks on ships have forced the country and its allies to consider it. On Monday, U.S. Defence Secretary Lloyd Austin made his way to the area for discussions. Following a spike on Friday due to speculation that the move away from the Suez Canal may raise rates, shipping stocks increased throughout European exchanges during morning trading on Monday. Maersk increased 3.5% in the first hour of trading in Copenhagen before retreating somewhat. For Egypt, the Suez Canal is a major source of foreign exchange. Approximately 90% of global trade is shipped by sea. The Houthi onslaught on shipping lanes, which started last month, is a “extremely serious threat to international trade,” according to the International Chamber of Shipping association, which also encouraged naval troops in the area to take all necessary precautions to repel the attacks. (With agency inputs)