Red Sea disruption could last a year: Japanese shipper

(Bloomberg) –Japanese shipping giant Mitsui OSK Lines Ltd. said that tensions in the Red Sea could disrupt the critical trade route for a year.

“It’s a historic event,” President Takeshi Hashimoto said in an interview. “The situation will continue at least for the coming two or three months. And as a worst-case scenario, six months or one year.”

Yemen’s Houthi rebels have been menacing merchant shipping since mid-November, attempting to board vessels and hitting them with missiles and drones. The US and UK responded with airstrikes on the militants in mid-January, escalating tensions that continue to disrupt shipping through the Red Sea.

The stretch of water is unavoidable for any ship wanting to use Egypt’s Suez Canal to cut between Asia and Europe, forcing hundreds of vessels to detour all the way around Africa.

There are currently enough available ships to weather the disruption, Hashimoto said in Goa, India, on Tuesday. However, if the economy were to suddenly grow and demand for goods increases, then it’ll create a shortage of shipping capacity, he warned.

MOL, with a fleet of about 800 vessels, said last month that it has halted transits via the Red Sea for safety reasons.

The Iran-backed Houthis, a group that controls much of Yemen including its capital Sanaa and the Red Sea port of Hodeida, have used boats laden with explosives — as well as missiles and airborne drones — as part of their campaign to disrupt shipping in the Red Sea and Gulf of Aden.

The militants say they are targeting vessels linked to Israel, the US and UK but many owners from elsewhere are nevertheless avoiding the area.

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Harry Byrne

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