Israel’s economy suffers, with an 85% drop in Red Sea port activity, escalating costs, and geopolitical tensions.
The Houthi rebels in Yemen have been encircling the Red Sea. This vital waterway has links Asia, Africa, and Europe for the past few months.
This has seriously harmed Israel’s economy, which is primarily dependent on trade with the Red Sea. Israel has already paid an estimated $3 billion for the siege.
The siege also impacted the Suez Canal, one of the world’s most significant shipping lanes. The canal handles 12% of all shipping in the world each year.
Due to the embargo, fewer ships can enter or exit the Red Sea, significantly decreasing traffic via the Suez Canal.
Israel and many other nations, whose imports and exports depend on the canal, have seen disruptions in trade and commerce.
The embargo has impacted the world economy. It has raised the price and dangers of shipping, creating delays and traffic jams at the ports.
Due to the uncertainty and risk posed by the blockade, shipping businesses have been forced to increase their labor, fuel, and insurance expenditures.
Some have chosen the more costly and time-consuming route around the Cape of Good Hope, extending their travel by weeks and thousands of kilometers.
This has impacted the shipping industry’s profitability, competition, and the items’ arrival time and quality.
Given that the majority of its trade occurs in the Red Sea, Israel has been severely impacted by the blockade. The number of ships coming and departing from the Port of Eilat, the sole port in Israel on the Red Sea, has dropped by an astounding 85%.
Due to potential price increases, reduced supply, and job losses, this has had a detrimental effect on Israel’s economy.
In addition, the Houthi rebels have promised to strike any ship sailing to or from Israel, regardless of where it is sailing, adding to the complexity and severity of the situation.
The rebels have insisted that food and medication be provided to Gaza, which is under blockade from Egypt and Israel.
As a result, the United States and the United Kingdom launched airstrikes on the Houthi military bases in Yemen, intensifying the violence in the area.
Because of the ongoing threat and difficulty posed by the blockade, the future of the maritime trade in the area is questionable.
