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Why Houthi rebels attacks on ships in Red Sea may raise gas prices, cause supply chain delays

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A picture taken during an organised tour by Yemen's Huthi rebels on November 22, 2023 shows the Galaxy Leader cargo ship, seized by Huthi fighters two days earlier, at a port on the Red Sea in Yemen's province of Hodeida. The Bahamas-flagged, British-owned Galaxy Leader, operated by a Japanese firm but having links to an Israeli businessman, was headed from Turkey to India when it was seized and re-routed to Hodeida November 19, according to maritime security company Ambrey. The Huthis said the capture was in retaliation for Israel's war against Hamas, sparked by the October 7 attack by the Palestinian militants who killed 1,200 people and took around 240 hostages, according to Israeli officials. (Photo by AFP) (Photo by -/AFP via Getty Images)

While the United States forms a coalition with other nations to protect ships transiting the Red Sea from the attacks by the Yemen Houthi rebels, even a week of further shipment delays could significantly impact American and global consumers, Northeastern University experts say. “We’re not in a dire situation yet,” says Nada Sanders, Northeastern distinguished professor of supply chain management. “There are estimates that it won’t get very dire. Having said that, I think we really don’t know at this point.” Even a week of interrupted shipments, Sanders says, can cause significant increases in the price of gas and consumer products.

In the last four weeks, Houthi rebels have carried out about a dozen attacks on cargo ships crossing the Bab el-Mandeb Strait, which separates the Red Sea from the Gulf of Aden on the shortest trade route between Europe and Asia. Several of the attacks by drones and ballistic missiles have damaged vessels, and the militants seized and still hold hostage 25 crew members of the MV Galaxy Leader, a vehicle carrier partly owned by an Israeli businessman.

Continue reading at Northeastern Global News.

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