An escalation in the attacks on the Red Sea could dramatically raise oil prices and inflation, warn experts
The US military carried out fresh strikes on Yemen’s Houthi rebels early Saturday, for the second day in a row—to diminish the Iran-backed group’s ability to attack ships transiting the Red Sea.
UN Security Council Ambassador Linda Thomas-Greenfield defended America’s actions, stating they were carried out “to restore stability in the Red Sea, while upholding the fundamental principles of freedom of navigation.”
Why is it important?
Houthi forces in Yemen have vowed to retaliate, and the consequences could impact world economies, including the US.
- Big car manufacturers, including Volvo and Tesla, have announced a pause in production due to the ongoing attacks in the Red Sea by the Houthis and the following US and UK air strikes.
- Productions at Abercrombie, Ikea, Electrolux, BP and Crocs are also affected.
- Several fuel shipping containers have rerouted to avoid getting caught in the crossfires, causing oil prices to rise 3% on Friday.
An escalation in the attacks on the Red Sea could dramatically raise oil prices and inflation, warn experts.