# How Attacks on the Red Sea Affect Global Trade and Endanger Asian Exports

- Link: https://www.thailand-business-news.com/politics/130120-how-attacks-on-the-red-sea-affect-global-trade-and-endanger-asian-exports
- Published: 2024-03-08T14:50:16+07:00
- Author: Boris Sullivan

The Red Sea has become a hotspot of maritime violence in recent months, as several
attacks on commercial vessels have disrupted the global trade and threatened the
security of the region.

## Key Takeaways

 * The Red Sea is a strategic waterway that connects Asia and Europe, carrying about
   12% of global shipping.
 * Trade volume through the Suez Canal dropped by 50% while transiting around the
   Cape of Good Hope surged by 74% compared to the previous year, indicating significant
   shifts in shipping routes.
 * Port calls to 70 ports in sub-Saharan Africa declined by 6.7% in the first two
   months of 2024, suggesting potential disruptions to supply chains and upward 
   pressure on inflation due to longer shipping times.
 * Shipping disruptions may impact official statistics on recorded imports and exports,
   making it challenging to gauge the underlying momentum of global trade and economic
   activity in the coming months, potentially leading to lower fiscal revenues for
   some low-income countries.

The attacks, which have been blamed on Iran-backed militias, have targeted ships
carrying oil, gas, and other **goods from Asia to Europe and vice versa**. The attacks
have caused delays, damages, and increased insurance costs for the shippers, as 
well as raised tensions among the countries bordering the Red Sea. The trade route
has been severely disrupted by the attacks of Houthi rebels, who are opposed to 
Israel’s war on Hamas in Gaza.

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The situation poses a serious threat to the supply of several key exports from Asia
to Europe, such as electronics, textiles and oil.

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The attacks on ships in the Red Sea region have significantly disrupted traffic 
through the Suez Canal, which is the shortest maritime route between Asia and Europe.
Approximately 15% of the world’s maritime trade volume normally passes through this
route. As a result, several shipping companies have diverted their vessels around
the Cape of Good Hope. This has led to an average increase of 10 days or more in
delivery times, causing detrimental effects on businesses with limited stock.

The attacks have also affected the export of Asian products to Africa and the Middle
East, which rely on the Red Sea route for their trade. The Red Sea is one of the
most important waterways in the world, connecting the Indian Ocean and the Mediterranean
Sea through the Suez Canal.