Yes, a ragtag band of Middle Eastern guerrillas can inflict a big blow to global shipping. From Tyler Durden at zerohedge.com:
Earlier, we reported that on Wednesday, the White House warned that this ongoing Red Sea turmoil could hit the US economy in a briefing:
The White House has warned that the potential for higher shipping costs to affect the U.S. economy amid diversion of ships from the Red Sea will depend on how long Houthi rebels sustain their attacks on commercial vessels.
“If we weren’t concerned, we wouldn’t have stood up an operation in the Red Sea, now consisting of more than 20 nations, to try to protect that commerce,” White House spokesman John Kirby said at a White House press conference on Wednesday, referring to the U.S.-led military force Operation Prosperity Guardian.
“The Red Sea is a vital waterway, and a significant amount of global trade flows through it. By forcing nations to go around the Cape of Good Hope, you’re adding weeks and weeks onto voyages, and untold resources and expenses have to be applied in order to do that. So obviously there’s a concern about the impact on global trade.”
Interestingly, Kirby was then asked by a reporter whether the spiraling situation would become “pocketbook” issue for Americans.
Kirby responded by saying “It would depend on how long this threat goes and on how much more energetic the Houthis think they might become.” He added: “Right now we haven’t seen an uptick or a specific effect on the U.S. economy. But make no mistake. This is a key international waterway. Countries more and more are becoming aware of this increasing threat to the free flow of commerce.”
Thus he fully acknowledged this is a distinct possibility that’s fast approaching.
