While she denied Israel The presence of any of its citizens among the crew, but the statement issued by the Houthis described the ship She was taken to a port in western Yemen because she was “Israeli”.
While the Houthis have renewed threats over the past weeks to target ships linked to Israel, the escalation of these tensions would raise further risks in this region of strategic importance to global trade, including potential impacts on markets. Oil The cost of shipping and the risk premium, with regard to maritime security in the region.
To what extent can the repercussions of these current and potential developments reach in this context in terms of economic impact and threat to the important waterways that represent the backbone of movement? commerce?
The full story of the ship’s detention
- The Houthi group detained a British-owned cargo ship operated by Japanese in the southern Red Sea, according to what Israel announced on Sunday. The Japanese company Nippon Yusen, which operates the Galaxy Leader, also announced that a car-carrying ship had been detained in the Red Sea.
- Israeli data indicate that the aforementioned ship is owned by Britons and managed by Japanese, and Netanyahu’s office said that “there are no Israelis among its crews.” However, a Houthi statement stated that an “Israeli” cargo ship was detained in the southern Red Sea and taken to a port in western Yemen.
- On board the ship were 25 individuals of different nationalities, including Ukrainians, Bulgarians, Filipinos, and Mexicans, according to Israeli data.
- Israel warned that this incident, which it described as an “Iranian terrorist act,” would have repercussions on international maritime security. While Tehran denied – through Foreign Ministry spokesman Nasser Kanaani, in a press conference on Monday – its involvement in the matter.
- On the American side, a military official announced that his country was aware of the situation, and merely said: “We are aware of the situation and are monitoring it closely,” according to Reuters.
- I appealed to the government JapaneseMonday, Saudi Arabia Oman and Iran, in order to rescue the crew of the ship held by the Houthis.
The most prominent potential repercussions if escalation continues
From Paris, energy economics expert, Nihad Ismail, points out in exclusive statements to the “Eqtisad Sky News Arabia” website that:
- “Houthi piracy” of ships using the Red Sea is not new, as it targeted oil tankers and commercial ships, and bombed oil facilities (..).
- These operations have serious economic and political repercussions.
- The negative impact on the economies of countries bordering the Red Sea, which is an important sea corridor for global trade and the transportation of gas and oil, cannot be ignored.
- Saudi Arabia And Egypt And Jordan They incur losses if navigation is disrupted, in addition to losses from the tourism sector, as well as ship congestion in ports.
- Add to this the rise in premium risks Geopolitical Which raises oil and gas prices, as well as the cost of sea freight And insurance Marine.
- This also prompts shipping companies to avoid the Red Sea and resort to using alternative sea routes, which raises costs and slows the arrival of goods and materials transported by sea, which means disrupting maritime supply chains and logistics.
Galaxy Leader ship
He explains that it is regarding the recent incident involving a kidnapping Galaxy Leader shipit may have given an indication of the potential risks, although the effect Ship hijacking It was small and brief.
An economics expert adds: energy“The greatest fear is the scenario of closing the Bab al-Mandab Strait to navigation and oil and gas tankers. If that happens, we will see an increase in the risk premium, an oil price above $125 to $140 per barrel, and difficulty in obtaining insurance services due to the risks.”
He stresses that Cost of marine insurance Since the war in Ukraine It rose about 25 percent and may double if attacks and piracy are repeated The Red SeaWe may see American military intervention not only against the Houthis but also against Iran (..).
It is noteworthy that a Houthi spokesman threatened on Sunday that his group “will target all ships owned or managed by Israeli companies or that fly the Israeli flag.”
The Houthi leader also threatened, a week ago, that his forces would launch more attacks on Israel and could target Israeli ships in the Red Sea and the Bab al-Mandab Strait.
How is Israel affected?
For his part, the economic researcher specializing in oil and energy affairs, Amer Al-Shobaki, said in exclusive statements to the “Eqtisad Sky News Arabia” website that the incident of the ship’s detention in the Red Sea, the Houthis in Yemen adopting this operation, and the continuing threats to seize Israeli ships, are factors that would raise margins. Oil, risk premium and insurance contracts for ships sailing in one of the world’s most important and busiest sea lanes (..).
In the same context, Al-Shoubaki speaks about the dangers that the escalation portends in this region, and in light of the current threats, by pointing out that:
- These expected repercussions raise the risk premium (Risk premium Or the percentage of return that an investor requires in exchange for investing in a specific asset as compensation for bearing the risks associated with it).
- The escalation of these risks would also raise the cost of insurance Ships Oil tanker using the Red Sea.
- The threats will become clearer in the coming days. This may certainly add additional burdens to the price of oil on the final consumer, which may also hinder efforts to reduce inflation rates in the affected economies.
- The impact will be significant on Israel in particular, which receives some foodstuffs via… Eilat Through the Red Sea and receives some oil shipments through it, and with the risks of ships docking in the port of Ashkelon, which is close to the Gaza Strip on the Mediterranean Sea.
It is noteworthy that the volume of Israel’s oil imports out of the total global oil trade amounts to 0.3 percent, which prompted analysts to reduce the impact of the problems that Israel may face regarding oil on the global economy.