The economic impact caused by the increase in attacks by the Houthi rebels on ships in the Red Sea since mid-November and subsequent Western airstrikes on the Iran-backed militia in Yemen can be “managed” if global demand remains weak, according to the World Economic Forum. 

There have been more than two dozen Houthi attacks on ships traversing the Red Sea since mid-November. The Red Sea route through the Suez Canal accounts for about 12% of all global trade and acts as the main waterway for ships moving goods between Europe and Asia, including the Middle East. Running through Egypt, the canal also contributes a substantial amount to the country's economy, but millions of dollars have been siphoned off its revenues since the Houthi attacks increased, and ships have avoided the area. 

In an interview with Al-Monitor, the WEF’s head of Middle East and North Africa Maroun Kairouz said global trade was resilient and would be able to cope in the short-term.

In the meantime, hundreds of ships have diverted from the Red Sea-Suez Canal route to take a much longer trip around South Africa’s Cape of Good Hope, pushing up costs, increasing carbon emissions and adding at least 10 more days onto the journey.