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The situation in the Red Sea continues to be tense, and a large number of container ships change their routes?

Jan 22,2024

The situation in the Red Sea continues to be tense and global shipping is seriously affected. A number of institutional analysis pointed out that a large amount of energy supply and trade transportation between Europe, the United States and the Middle East through the Red Sea waters, this maritime throat continued to block or will push up the level of inflation again, Europe's energy supply will also face impact.

According to statistics from the Netherlands International Group, after mid-December last year, about 80% of container ships on the Red Sea-Suez Canal route were forced to change their routes, reaching 90% by early January this year.

Statistics show that about 30% of the global trade in consumer goods is transported through the Suez Canal. Shipping delays and rising freight costs have led to higher container freight rates, which will also lead to a certain increase in the price of all goods in the container.

A research report released by the Oxford Institute of Economics in the United Kingdom in January this year believes that there are upward risks to global prices. The report said that if container shipping costs remain at current levels, it could increase global inflation by about 0.6 percentage points.

According to US media reports, inflation in the United States and Europe rose in December before the surge in shipping prices had time to affect consumer prices. European economists warned that the rebound in inflation and the increase in "upside risks" mean that the European economy still faces uncertainty.

The Red Sea-Suez Canal route is an important shipping route for oil and its derivatives from the Persian Gulf to Europe and the United States.

Since December 15 last year, 25 LNG carriers have been diverted from the Red Sea to bypass the Cape of Good Hope in Africa, according to market research firm Kepler.

In addition, the data show that Middle Eastern crude oil destined for Europe is declining. In December 2023, exports will be around 570000 barrels per day, almost halving from 1.07 million barrels per day in October 2023, which will have an impact on Europe's energy supply.

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