Commercial cargo ships heading to Israel are attacked by the Houthis in the Red Sea (Getty)
After nearly 5 months of the Israeli war on the Gaza Strip, the economic repercussions in Israel, the countries of the region and the world continue to affect the tourism and trade sectors.
The economist at the Orsam Center for Middle East Studies, Oguzhan Demir Dogan, expected that pressures on global and regional economies would increase if Israel's war on the Gaza Strip continued.
Anatolia News Agency quoted the economist, as part of his assessment of the economic impact of the war on Gaza, saying that it affects oil prices, global trade routes, and global inflation.
Impasse
Dogan adds that "the Israeli attacks on Palestine are dragging the regional economy into a dead end," noting that there is a risk of rising oil prices, in addition to the rise in shipping prices observed since the beginning of the war.
Oil prices rose from an average of $75 before the war on the Gaza Strip, and reached $86 in the first weeks, while they are currently stable at $82.4 per barrel of Brent.
The cost of shipping passing through the Bab al-Mandab Strait increased by up to 170% due to the Houthi group’s attacks on ships linked to Israel, the United States, and Britain.
Dogan pointed out that the tension in the Red Sea caused ships heading towards Europe to change their course to the Cape of Good Hope, south of South Africa.
He added, "Alternative routes increase the cost of ship fuel back and forth by 40% on average," and the cost of some trips exceeded 170%, according to the International Monetary Fund.
“As a result, with the decline in container capacity and the rise in fuel and operating costs due to the long sailing period, this has caused transportation costs to increase significantly,” Dogan explained.
He stated that the decline in maritime shipments through the Suez Canal affected the Egyptian economy, as the canal is considered an important source of foreign currency for the country.
As for the negative impact of the war in Gaza on China, which passes 80% of its foreign trade through the Red Sea, Dogan stated that China was negatively affected by the developments, and as a result it put alternative land routes on its agenda to meet external demand.
Dogan also said that international investors, who are concerned about the ongoing instability, are reconsidering their investment strategy in countries in the region.
He expected that the pressures on global and regional economies would increase if the war continued, leading to a stalemate.
Recently, the Danish shipping company Maersk announced a decline in its profits by 87% on an annual basis, during the last quarter of 2023, due to the Red Sea crisis.
Source: Anadolu Agency