Houthi attacks on commercial ships in the Red Sea hiked the shipping insurance rates, with fees being imposed to cover risks associated with conflicts.
The Red Sea is a vital route that usually carries about 12-15% of global trade, based on European Union figures © Mena Today
Houthi attacks on commercial ships in the Red Sea hiked the shipping insurance rates, with fees being imposed to cover risks associated with conflicts.
Since last Nov. 19, Iran-backed Houthis have targeted ships in the Red Sea that they suspect are linked to Israel or heading to its ports.
Houthis say their attack is in support of the Gaza Strip, which has been witnessing a war since Oct. 7, 2023.
According to the International Monetary Fund (IMF), Red Sea container shipping dropped 30% within a year.
The Red Sea is a vital route that usually carries about 12-15% of global trade, based on European Union figures.
Commercial boats need to obtain three types of insurance: hull insurance covers damage to the vessel, cargo insurance covers the vessel's load, and protection and indemnity insurance includes coverage for damage caused to third parties.
According to a London Stock Exchange Group report, the cost of a trip from Asia to northwestern Europe increased by 35% for a large container ship, and up 110% for an Aframax, an oil tanker with a deadweight between 80,000 and 120,000 metric.
Analysts from Moody's Investors Services said on Thursday that attacks on merchant vessels in the Red Sea have delayed cargo and sent higher shipping costs, but soft demand and ample ship availability are muting the impact on inflation.
Rerouting ships around Africa requires anywhere from 6% to 10% more vessels due to longer sail times, slowing the return of ships to their origination points, and sending on-demand spot rates on some routes up more than 100%.
The increases came off rock-bottom levels, and shipping experts expect them to normalize.
An apparent drone attack - claimed by the Iranian-backed Houthi militia - hit central Tel Aviv in the early hours of Friday, killing one man and slightly wounding four others, the Israeli military and emergency services said.
Saudi Arabia's Crown Prince and de facto ruler, Mohammed bin Salman, called Iran's newly elected President Massoud Pezeshkian on Wednesday to congratulate him on his recent election victory, according to Saudi state media reports.
Denmark's A.P. Moller-Maersk said on Wednesday that disruption to its container shipping via the Red Sea had extended beyond trade routes between the Far East and Europe to its entire global network.
To make this website run properly and to improve your experience, we use cookies. For more detailed information, please check our Cookie Policy.
Necessary cookies enable core functionality. The website cannot function properly without these cookies, and can only be disabled by changing your browser preferences.