London, Jan 10 Attacks by Iran-backed militants in the Red Sea have effectively closed one of the world’s main trade routes to most container ships and vessels which carry almost every necessary items from one corner of the globe to another, media reports said.
A prolonged closure of the waterway, which connects with the Suez Canal, can snarl global supply chains and drive up the prices of manufactured goods at a crucial moment in the battle to defeat inflation. The Suez Canal accounts for 10-15 per cent of world trade, which includes oil exports, and for 30 per cent of global container shipping volumes.
The Houthi militants, based in Yemen, say they are taking revenge for Israel’s war against Hamas in Gaza. The US military and its allies have beefed up maritime security but the attacks continue, 21 Houthi missiles and drones were shot down late Tuesday, CNN reported.
As the crisis persists, the stakes for the global economy are rising. Retailers are already warning of delays, and the cost of shipping goods is increasing, CNN reported.
In a biannual report released on Tuesday, the World Bank warned that the disruption to key shipping routes was eroding slack in supply networks and increasing the likelihood of inflationary bottlenecks.
The danger to crew, cargo and vessels has forced carriers to reroute ships around the Cape of Good Hope in South Africa, resulting in delays of up to three weeks, CNN reported.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor