Several major shipping companies have announced the suspension of their cruise ship navigation in the Red Sea due to the escalating attacks by the Houthis amid the ongoing conflict between Israel and Hamas. Will Lebanon be affected?
The situation keeps on worsening in the Red Sea, where several commercial vessels have been attacked by Yemen's Houthi rebels amid the ongoing conflict between Israel and Hamas. As a result, several major shipping companies have decided to suspend the transit of their vessels through the Red Sea, Bab el-Mandeb Strait, and hence the Suez Canal “until further notice.” Ships are now forced to take the longer route around the Cape of Good Hope, adding approximately two weeks to the journey.
Lebanon Somewhat Unaffected
So far, Lebanon's imports seem to be unaffected by these maritime disruptions.
A ministerial source informed This is Beirut that Lebanon stands out from other countries in the region due to its access to the Mediterranean Sea. "Most of the seeds and commodities essential for food security pass through Turkey and Russia via the Bosphorus. Differently put, we are not directly impacted by the suspended navigation in the Red Sea," the ministerial source explained, emphasizing that the disruption will primarily affect countries along the Red Sea and international trade utilizing the Suez Canal.
In terms of fuel, Head of the Fuel Importers' Syndicate Maroun Chammas told This is Beirut that the fuel ships that serve Lebanon do not sail through the Red Sea.
The same applies to wheat. Head of the Syndicate of Wheat Importers Ahmad Hoteit stated to This is Beirut that the wheat destined for Lebanon makes its way from Istanbul via the Black Sea and the Bosphorus, and not via the Red Sea route.
For his part, General Director of the Ministry of Economy Mohammad Abou Haidar acknowledged that the interruption of navigation by several shipping companies will undoubtedly affect Lebanon. However, the ministry currently lacks specific details on the extent of the impact.
Head of the Food Importers' Syndicate Hani Bohsali said he believes Lebanon will undoubtedly be affected if the situation persists. "Currently, we are keeping a close eye on the developments, especially because not all maritime companies have opted for the route around the Cape of Good Hope. Some prefer to wait for a few days near the Red Sea to assess the situation," he noted.
For now, insurance and transportation costs have risen, as reported by a raw materials importer, and this will ultimately impact the consumer.
An Expected Increase in Freight Costs
In this context, it should be noted that the Bab el-Mandeb Strait, separating Yemen from Djibouti, holds strategic significance in maritime trade and energy supply between the Gulf of Aden and the Red Sea. It stands as the fourth most vital maritime passage globally in terms of energy supply, playing a crucial role in the trade of hydrocarbons from the Arabian Gulf to the Suez Canal (via the Sumed pipeline).
This strait represents 40% of global maritime traffic. Approximately 60 supertankers set sail from Gulf countries each day, transiting this strait to reach Asia. According to available data, this strait witnesses the daily transport of 4.8 million barrels of oil en route to the Suez Canal.
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