Red Sea crisis poses a risk for European Union economy

Red Sea crisis poses a risk for European Union economy

The instability in the Red Sea have been causing a trade disruption which poses a risk for the EU’s economic outlook. Moreover, the crisis may be leading to vulnerability in supply and price of energy.

The bloc’s trade commissioner Valdis Dombrovskis says there are disruptions in shipping routes concerning the Red Sea and, correspondingly, the use of the Suez Canal. Although the effects are contained for the time being, the Houthi rebel attacks and their influence on the European economy must followed closely.

Suez Canal

Despide the Red Sea and the Suez Canal bring one of the world’s most strategic maritime trade routes, where around 15% of global shipping traffic passes, the recent raft of attacks by Iran-backed Houthi rebels on international commercial vessels in the Red Sea has forced many major shipping firms, some European, to divert shipping routes in order to avoid the area. Other companies have paused shipping operations all together in fear of being targeted by the rebels. These changes bring about threats to upend world trade with delays and added costs.

To read more about the Europian economic implications due to the Red Sea crisis press here.

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