Red Sea attacks force shift from efficiency to resilience in global trade

The Story in Brief

Renewed Houthi attacks in the Red Sea have turned the Bab el-Mandeb and Strait of Hormuz into geopolitical weapons, threatening nearly a fifth of globally traded oil and a tenth of maritime commerce, English.Mathrubhumi reports. The broader regional conflict after the US-Israeli campaign against Iran in February has made Yemen a proxy theatre again. Vessels linked to Saudi Arabia face high risk even though the Bab el-Mandeb is formally open. Freight rates, insurance and shipping costs have risen, adding inflationary pressure to global supply chains.

Governments and businesses are now accelerating trade route diversification away from the Suez-Red Sea corridor, which has been optimised for efficiency but is exposed to geopolitical shocks. Alternatives include the Cape of Good Hope, the Northern Sea Route, and land bridges like the China-Europe Railway Express and India-Middle-East-Europe Economic Corridor (IMEC). None match the cost advantage of the Suez route, but together they signal a shift towards redundancy. For India, the crisis raises freight costs, complicates energy imports, and underscores the need to become a net security provider in the Indian Ocean Region.