The United Nations’ trade agency sounded the alarm Thursday about the disruption of global trade caused by attacks in the Red Sea, the war in Ukraine, and falling water levels in the Panama Canal.
Jan Hoffmann, a trade expert at the United Nations Conference on Trade and Development (UNCTAD), warned that shipping costs have already risen and energy and food costs have been affected, increasing the risk of inflation.
He added that since Houthi rebels in Yemen began attacking ships in the Red Sea in November, major players in the shipping industry have temporarily stopped using the Suez Canal, a vital waterway linking the Mediterranean Sea to the Red Sea and a key route for energy and goods between Asia and Europe.
Hoffmann said the Suez Canal handled 12% to 15% of global trade in 2023, but UNCTAD estimates that the volume of trade passing through the waterway has fallen by 42% in the past two months, according to the Associated Press.
Since November, the Iran-backed Houthis have launched at least 34 attacks on ships through the waterways leading to the Suez Canal, the group said the attacks are in support of Palestinians in Gaza, and vowed to continue the attacks until the war between Israel and Hamas ends.
The United States and Britain responded with strikes against Houthi targets, but the rebels have continued their attacks.
Hoffmann, who heads the UNCTAD’s trade logistics branch in Geneva, said in a video conference with UN reporters that the Houthi attacks are happening at a time when other major trade routes are under pressure.
He added that the nearly two-year war since Russia’s special military operation in Ukraine on February 24, 2022, and other geopolitical tensions have reshaped the routes of oil and grain trade, including through the Black Sea.
