Global supply chains may be disrupted by the Red Sea crisis
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London (Uttam Hindu News): The attacks by Iran-backed terrorists in the Red Sea have effectively closed one of the world’s main trade routes for most container ships and vessels that carry almost every essential commodity from one corner of the world to the other. Let’s go. This was said in the media report. A prolonged closure of the waterway, which connects to the Suez Canal, could disrupt global supply chains and send prices of manufactured goods soaring at a critical moment in the fight to beat inflation. The Suez Canal carries 10-15 percent of world trade, including oil exports and 30 percent of global container shipping volume.
Yemen-based Houthi militants say they are taking revenge for Israel’s war against Hamas in Gaza, CNN reports. The US military and its allies have stepped up maritime security, but attacks have continued, with 21 Houthi missiles and drones shot down late Tuesday.
As the crisis persists, risks to the global economy are increasing. Retailers are already warning of delays and the cost of shipping merchandise is rising. In a biennial report released Tuesday, the World Bank warned that disruptions to key shipping routes are slowing supply networks and increasing the likelihood of inflationary disruptions. The danger to crew, cargo and ships has forced carriers to reroute ships around the Cape of Good Hope in South Africa, resulting in delays of up to three weeks, CNN reports.
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