Shipping expenses in the Red Sea are increasing due to heightened risks caused by Houthi attacks on an increasing number of commercial vessels.
The expenses associated with shipping goods through the Red Sea are increasing due to escalating attacks by Yemen's Houthis on vessels they believe are linked to Israel. Concerns are rising about potential disruptions to global supplies passing through the region. The Houthis recently claimed responsibility for targeting a Norwegian commercial tanker as a protest against Israel's actions in Gaza. The strategic importance of the Bab al-Mandab Strait, through which about 23,000 ships traverse, heightens the risks. Former Royal Navy vice admiral Duncan Potts emphasized that these attacks could pose a broader global economic threat. The southern Red Sea is now considered a high-risk area by the London insurance market, leading to increased war risk premiums for shipping companies. Some vessels are opting for alternative routes, such as navigating via the Cape of Good Hope, to avoid the Red Sea, resulting in longer journeys and additional costs. The recent attack at night signifies a new capability by the Houthis, raising concerns about the evolving situation. Israel's Ashdod port sees these attacks as a direct threat to the country's maritime trade. Efforts, including discussions about a maritime task force, are underway to ensure the safe passage of ships in the Red Sea. The UN's shipping agency emphasizes the importance of preventing commercial shipping from becoming a casualty of geopolitical conflicts, urging countries to collaborate for unhindered and safe global navigation.
