Red Sea crisis escalating already disrupted global supply chains

*News: Global Geopolitics*

*First, trade wars and then Covid-led restrictions disrupted global supply chains.*

• The conflict between Israel and Hamas has intensified and escalated across land and reached the sea level

• Initially attacks by Yemen's Iran-aligned Houthi militants targeted only oil ships in the Red Sea. 

• But now every cargo ship is in danger and being rerouted around Africa, which is disrupting global maritime trade.

*It is noteworthy that the Suez Canal accounts for more than 10% of global trade and more than 30% of container transportation.*

Check out the importance of the Red Sea from the below-attached map

*Economic costs of Red Sea attacks*

• On Monday, two major European oil and gas companies said their tankers would steer out of the waters off the coast of Yemen, a necessary stop for ships that use the Suez Canal to connect Europe and Asia.

• Ikea – a global furniture giant stated that it is facing delays, due to disruptions in the Red Sea attacks

• The disruption will weigh on firms that carry consumer products and commodities like coal, maize, and especially energy supplies.

*Impact of Supply Chain Disruption*

• Gas prices in Europe rose by 13% in response to the clearest indication yet of an interruption in energy supplies since the start of the Gaza war.

• Tuesday saw increases in Brent oil futures, which had risen as high as 3.9% on Monday.

• Global Energy inflation as well as consumer inflation will further escalate if this supply disruption issue is not resolved soon.

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