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The Red Sea Escalation: Implications on Global Seaborne Trade

In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market spot rates in various shipping segments. The recent attacks by the Houthi rebels in the Red Sea have already started to significantly affect trading activities, especially in the container segment. With the start of the new year, the crisis now appears to be impacting Red Sea vessel counts in the crude tanker segment, while spot rates in the Atlantic routes have spiked and piqued the interest of the market, signaling an escalation of the crisis with daily occurrences of new attacks.

In the dry bulk segment, the market has not experienced a significant impact yet. However, as time progresses, the threat of Houthi attacks on both dry and wet seaborne trade appears to be escalating. Figure 1 below, examines which segments were the most exposed to Suez canal crossings in 2023. Suezmax and Aframax and Supramax and Panamax represent more than half of the total crossings in tankers and dry bulk respectively. 

A report from Signal posted on February 2, 2024.


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