Global trade route choked by militants

Energy giant BP is the latest company to stop sending tankers through the Red Sea, raising fears of a major disruption to world trade, says Stanley Reed in The New York Times.

Major shipping firms including MSC, Maersk, Evergreen and Hapag-Lloyd have also said they will avoid the area after it came under attack from Iranian-backed Houthi militants in Yemen. The Red Sea provides access to the Suez canal from the Persian Gulf, and the volume of oil being carried through the canal is already down by two-thirds this month.

Global supply chains are also under threat, says Jonathan Yerushalmy in The Guardian.

About 12% of global trade passes through the Red Sea, including 30% of global container traffic, which means delays in the area could lead to “significant disruptions the world over”.

Experts are worried about the ease with which the Houthis have been able to disrupt the most significant trade route on the planet, and that their goals have expanded from targeting Israeli ships in protest at the war in Gaza to targeting all ships, whatever their nationality. The US is assembling a coalition of countries to safeguard vessels.

Agreeing on a strategy will be harder than it looks though, say Sam Dagher and Mohammed Hatem on Bloomberg. The US and Britain have been shooting down drones and the US is considering strikes against the group itself, but for now it still “prefers diplomacy”.

Disagreements between Saudi Arabia and the United Arab Emirates (UAE), who support competing factions against the Houthis and favour differing ways of dealing with them, are “major roadblocks”.

The UAE is lobbying for direct action; the Saudis fear that would provoke the Houthis and imperil a fragile truce in Yemen’s war. There’s mounting pressure on the US to act and “a pivot is coming”, say analysts at Rapidan Energy Group. That “may prompt markets to start pricing in geopolitical risk”.