Escalating tensions in the Red Sea are raising concerns about oil price volatility and disruptions to global trade, according to Moody’s Investors Service and the International Monetary Fund (IMF). The American credit rating agency warns that ongoing shipping disruptions in the Red Sea, fueled by Houthi rebel attacks, could lead to increased oil price volatility, spikes in shipping rates, and higher marine insurance costs. Hapag-Lloyd CEO Rolf Habben Jansen believes the attacks are unlikely to stop soon, potentially forcing companies to bypass the Suez Canal. As per a January IMF report, roughly 12% of global trade in the first half of 2023 relied on this crucial waterway connecting the Red Sea to the Mediterranean. Additionally, around 15% of global shipping traffic and a significant portion of Egypt’s foreign currency income depend on this vital route.
