Abstract:

The Red Sea has turned to be a stand of conflict since half of November 2023 when the rebel group Houthis from the Yemen side performed a series of attacks. These operations, aimed at destroying vessels associated with Israel, have thrown the pattern of the global shipping industry into great chaos, with the most prominent companies, such as A.P. Møller-Mærsk, diverting their trade from the region to ensure safety (Berman, 2024). The attacks caused an increase in insurance companies that insured ships that were using the Red Sea and broadened the fears about the repercussions on global trade and the economy. A distraction from a third of the removed cargo traffic and a considerable amount of energy supply is transited through the Red Sea, an interference for a few months could lead to long-term consequences carrying severe implications such as higher consumer prices and supply chain disruptions (Berman, 2024).