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https://npr.org/2024/01/20/1225716149/houthis-yemen-redsea-ships-israel-hamasshipping industry experts hope lessons learned during the COVID-19 pandemic, the Suez Canal disruption in 2021 and Somali pirate attacks more than a decade ago will help mitigate widespread problems this time, should the conflict widen in the Red Sea.
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It all depends on what Irans tries to do afterwards, I think.
Egypt is really taking it in the shorts, though... their national income will be down to almost nothing until this is sorted out, and that certainly isn't going to help Mideast stability... not at all. You think that maybe Egypt might take a very dim view of Israel on this? And where is Israel trying to drive the Gaza Palestinians?? Oh, that's right... the Egyptian Sinai. This should end well...
In just a few months, Yemen’s Houthis have taken an outsize bite out of global shipping — and have begun to threaten the economy of their stated target, Israel.
While Israel, which relies on the Mediterranean more heavily than the Red Sea, has proved resilient, experts warn that the attacks already pose a threat to Israel’s economy and could come to take a greater toll if they persist in the face of U.S.-led airstrikes.
The Port of Eilat, Israel’s toehold on the Red Sea, has seen an 85 percent drop in shipping activity, its chief executive told Reuters last month. Without a reversal, “unfortunately we will likely have to furlough workers,” he told the Jeruslaem Post.
Launching missiles at commercial ships in the Red Sea, a choke point on one of the world’s key maritime routes, turns out to be a sure way to draw the ire of the United States and its allies: Nearly a fifth of freight bound for the U.S. east coast usually passes through the Red Sea, en route to the Suez Canal, and global shipping giants have begun to send ships the long way around Africa.
The Houthis have maintained that since they began launching strikes, in solidarity with Palestinians under Israeli bombardment in the Gaza Strip, that their primary goal was not to upend world commerce, but to apply pressure on Israel for a cease-fire in Gaza.
While most of Israel’s maritime trade passes through Haifa and others ports on the Mediterranean — subject to broader delays in global shipping caused by the Red Sea crisis but not necessarily more so than ports elsewhere — Eilat is a key entry point for some imports from East Asia.
The shipping industry has responded to the Houthis’ focus on shipping to Israel. Evergreen, the Taiwanese shipping giant, said last month it would “stop accepting Israeli cargo” immediately “for the safety of cargo, ships and crew.” Maersk last month introduced a surcharge on shipments to Israel to help cover rising insurance costs.
The global economic impacts of the Red Sea strikes, rather than specific effects on Israel, could come to be the larger source of pressure, contributing to a sense among Israel’s allies that the entire region could spiral into violence.
As long as the war in Gaza continues, the risks that the situation in the Red Sea degrades further and that regional skirmishes such as on the Lebanese border develop into war “increase exponentially,” said Dan Arenson, a geopolitical risk adviser at J.S. Held, a global risk consultancy. “I think the Biden administration gets that.”
If the "Iron Dome" can stop Hamas rockets methinks something similar will be able to take out the Houthis.
The recent strike on a US container ship caused little damage. Once the shipping companies see the escorts that are available ( this is not a very long waterway) it is likely things will return to near normal
Exaggeration obviously, for sake of contrast, but you can see the problem. Our tax dollars at work.
U.S. defense spending levels will, in all likelihood, remain substantial when these risks are considered.
With $34 trillion in national debt, what will be the knock-on effects of all this military spending?
The peace dividend of the 90s (after the dissolution of the Soviet Union) is long gone.
The Red Sea attacks make things difficult. On the other hand, the situation offers maritime shippers the perfect excuse to raise prices. I wonder which way all of this will shake out? And is ASC thriving amid the situation because they do not sail through the Suez? I can find no recent press releases or announcements.
https://www.morningstar.com/stocks/xnys/asc/quote
One month old:
https://seekingalpha.com/article/4658588-ardmore-shipping-quality-company-discount-to-play-shipping-cycle