The Red Sea, a narrow waterway connecting the Mediterranean Sea to the Indian Ocean through the Suez Canal, is one of the world’s most important trade routes. It carries goods like oil, electronics, food, and clothing between Asia, Europe, and Africa. However, since late 2023, this vital region has been caught in turmoil, causing major disruptions to global trade. This article explains why the Red Sea is in chaos and how it affects the ships that carry goods around the world, in simple terms.
Why Is the Red Sea in Turmoil?
The main reason for the trouble in the Red Sea is attacks by a group called the Houthi rebels, based in Yemen. The Houthis are a political and military group involved in Yemen’s civil war, and they are backed by Iran. Since November 2023, they have been attacking commercial ships passing through the Red Sea, especially near the Bab el-Mandeb Strait, a narrow choke point at the southern end of the sea. They use drones, missiles, and even attempts to hijack ships.
The Houthis say these attacks are in response to the conflict in Gaza, where Israel has been fighting Hamas. They claim to target ships linked to Israel, the United States, or their allies to pressure these countries to stop the war in Gaza. However, many ships with no clear connection to these countries have also been attacked, making the Red Sea a risky place for all shipping companies. Over 500 attacks have been reported, damaging more than 100 vessels.
The situation is made worse by broader tensions in the Middle East. Conflicts involving Iran, Israel, and Western countries like the U.S. and U.K. have added to the instability. The U.S. and its allies have responded with military actions, including strikes on Houthi targets and a multinational naval operation called Operation Prosperity Guardian to protect ships. Despite these efforts, the attacks continue, and the region remains unstable.
How Has Maritime Trade Been Affected?
The turmoil in the Red Sea has caused big problems for global trade, as the Red Sea and Suez Canal handle about 12-15% of all world trade and 30% of global container traffic. Here’s how it has impacted shipping and the global economy:
Ships Are Taking Longer Routes: To avoid attacks, many shipping companies, including giants like Maersk, MSC, and Hapag-Lloyd, have stopped using the Red Sea. Instead, they reroute their ships around the southern tip of Africa, via the Cape of Good Hope. This detour adds 10-20 days and up to 4,000 miles to each journey. For example, a trip from Asia to Europe that used to take about 30 days now takes 40-50 days. This delay slows down the delivery of goods like clothes, car parts, and food.
Higher Costs for Shipping: The longer route means ships use more fuel, crews work longer, and companies need more vessels to keep up with demand. Each trip around Africa can cost an extra $1 million in fuel alone. Insurance costs have also skyrocketed, with war-risk premiums for ships in the Red Sea jumping from 0.07% to 2% of a ship’s value. These extra costs make shipping more expensive, and companies often pass these costs on to consumers, raising the price of goods.
Supply Chain Disruptions: The delays and higher costs have caused chaos in global supply chains. Factories and stores that rely on timely deliveries are struggling. For example, in early 2024, companies like Tesla and Volvo had to pause production in Europe because they couldn’t get parts from Asia on time. Retailers like Marks & Spencer have faced shortages of clothes and shoes, as 40% of Europe’s clothing imports normally pass through the Red Sea.
Impact on Specific Goods: Certain products have been hit hard. Wheat shipments dropped by 40% in early 2024, raising food prices in some African countries. Coffee prices, like robusta, have climbed 9%, and India’s sunflower oil imports have fallen due to higher shipping costs. Oil prices have stayed relatively stable, but there’s a risk of bigger disruptions if the conflict spreads to major oil-producing countries like Iran.
Economic and Environmental Effects: The Suez Canal, which relies on Red Sea traffic, has seen a 50-66% drop in ships passing through, hurting Egypt’s economy. Ports like Singapore are facing congestion as more ships take alternative routes. Environmentally, the longer routes mean ships burn more fuel, increasing CO2 emissions by up to 53% for some journeys, which is bad for the planet.
What’s Being Done About It?
Efforts to fix the situation include military actions to protect ships and diplomatic talks to calm the conflict. The U.S.-led Operation Prosperity Guardian involves countries like the U.K., Germany, and South Korea to guard ships and deter Houthi attacks. However, these efforts haven’t fully stopped the attacks. The United Nations, Saudi Arabia, and Egypt have tried to negotiate peace, but the Houthis have not agreed to stop. Shipping companies are also adapting by diversifying their supply chains, using digital tools to track shipments, and planning earlier shipments to avoid delays.
Why This Matters for the Global Economy
The Red Sea crisis shows how fragile global trade can be. When a single route like the Red Sea is disrupted, it affects prices, supplies, and economies worldwide. For poorer countries in Africa that rely on food and fuel imports, higher prices can lead to hunger and economic hardship. For wealthier countries, it means higher costs for everyday goods and potential inflation. The crisis also highlights the risks of depending on a few key trade routes and the need for more resilient supply chains.
Importance for UPSC and State PCS Exams
The Red Sea turmoil is a critical topic for UPSC and State PCS exams because it touches on several key areas tested in these exams:
International Relations: The crisis involves geopolitical tensions in the Middle East, including the roles of Iran, Israel, the U.S., and Yemen. Understanding these dynamics is essential for questions on global conflicts and India’s foreign policy, as India relies on the Red Sea for trade with Europe and Africa.
Geography: The Red Sea and Suez Canal are strategic maritime choke points. Exam questions often cover the importance of such routes for global trade and their vulnerability to disruptions.
Economy: The impact on global trade, supply chains, and inflation is relevant for economic sections of the syllabus. India’s rice exports and oil imports, which pass through the Red Sea, have been affected, making this a key issue for questions on trade and economic policy.
Current Affairs: The crisis has been in the news since late 2023, with updates in 2024 and 2025. UPSC and PCS exams emphasize recent events, so candidates need to know the causes, impacts, and responses to the Red Sea situation.
Environment: The environmental impact of increased CO2 emissions from longer shipping routes ties into questions on climate change and sustainable development, which are increasingly important in these exams.
By studying this topic, candidates can answer questions on global trade, geopolitical conflicts, and their economic and environmental consequences, which are common in both prelims and mains exams.
