The Houthi attacks in the Red Seas are having a large impact on economies in different ways. The consumption of fuel used by ships avoiding the area has increased dramatically with many vessels avoiding the Red Sea and sailing around South Africa’s Cape of Good Hope, which can add several thousand miles and two to three weeks of travel time compared with a voyage through the Red Sea.

One port that has benefitted from the crisis is Singapore where the sales of bunker fuel have increased to an all-time high. The vessels that are sailing around Africa require much more fuel for the extra time at sea.

However, the main economic sufferers are Egypt where the income from tolls for the Suez Canal have decreased dramatically. The revenue from the Canal suffered a drop of 64.3% in May 2024 compared to May 2023 which relates to a loss of $31 million.

In additon to Egypt, Europe in particular is suffering inflation due to the increased delivery costs from the Far East. Also delays have been inevitable with the extra time the voyage takes by sailing around the Cape of Good Hope.

It is time that this problem is sorted out once and for all and shipping is allowed to return to normal in this region.