Trade in Red Sea experiences significant drop due to rising Middle East tensions
Date
10/8/2024 5:46:53 AM
(MENAFN) Trade in the Red Sea, which once accounted for 10 percent of global maritime trade, has experienced a significant decline due to rising tensions in the Middle East, particularly following Israel's ongoing attacks on Gaza, which began on October 7, 2023. These attacks have resulted in nearly 42,000 fatalities and approximately 100,000 injuries. In retaliation, the Iranian-backed Houthis in Yemen have targeted commercial vessels in the Red Sea and Bab-el-Mandeb Strait that they allege are linked to Israel, with these attacks intensifying in December of last year.
As a result of the escalating conflict, most commercial vessels that traditionally utilized the Red Sea and Bab-el-Mandeb Strait have opted to reroute around the Cape of Good Hope, the southernmost point of Africa. According to data from MarineTraffic, total vessel transits in the Red Sea have plummeted by 56 percent year-on-year as of September. Container traffic suffered the most severe decline, dropping by 73 percent, while liquefied natural gas (LNG) vessel traffic fell by 87 percent. Other categories also saw reductions, with dry breakbulk down by 54 percent and mixed dry cargo down by 37 percent.
The declines extend to other types of vessels, with liquefied petroleum gas (LPG) traffic decreasing by 74 percent, roll-on/roll-off vessel traffic down by 78 percent, and wet bulk cargo traffic falling by 41 percent. Notably, there were no LNG ships passing through the Red Sea in February and March of this year due to the heightened risks from ongoing attacks.
In stark contrast, maritime traffic around the Cape of Good Hope has surged, with overall ship traffic increasing by 76 percent over the past year. Container ship transits skyrocketed by 420 percent, while mixed dry cargo vessel traffic rose by 157 percent. Additionally, dry breakbulk vessel traffic climbed by 38 percent, and LNG traffic jumped by 400 percent. LPG vessel traffic increased by 138 percent, with roll-on/roll-off vessels up by 350 percent, and wet bulk cargo vessels rising by 77.5 percent.
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