This article is from the source 'bbc' and was first published or seen on . The next check for changes will be

You can find the current article at its original source at https://www.bbc.co.uk/news/business-67947795

The article has changed 17 times. There is an RSS feed of changes available.

Version 4 Version 5
Red Sea attacks could shrink economy, warns Treasury Tesla halts Berlin production over Red Sea disruption
(about 1 hour later)
Houthi rebels hit the Maersk Hangzhou, seen here in 2018, with a missile in the Red Sea in December Tesla is suspending manufacturing at its only European electric car factory as attacks in the Red Sea disrupt supplies.
The government is concerned ongoing attacks on shipping in the Red Sea could further shrink the UK economy. The firm said longer delivery times had created a gap in its supply chains as shipping companies avoid the route.
The BBC understands the Treasury has modelled scenarios including crude oil prices rising by more than $10 a barrel and a 25% increase in natural gas. US and UK forces have carried out air strikes against Iran-backed rebels over their attacks on vessels in the area.
On Thursday night, the UK launched air strikes against the Houthi rebels. The UK government fears if the disruption to cargo traffic spreads then another energy shock is possible.
The government fears if the disruption to cargo traffic spreads to tanker traffic then another energy shock is possible. The electric carmaker is thought to be the first company to reveal a problem with its supply chains after shipping firms came under attack by Houthi rebels.
On Friday, the price of Brent crude - the international benchmark for oil prices - rose by 2% to $78.94 per barrel while US West Texas crude increased by 2.1% to $73.55. "The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production in Gruenheide," Tesla said in a statement to Reuters.
The boss of shipping giant Maersk has also said "significant disruption" to global trade was already being felt "down to the end consumer". It said its Berlin plant will close on 29 January and reopen on 11 February "with the exception of a few sectors" due to a shortage of components.
Houthi rebels in Yemen have stepped up attacks on commercial vessels since the start of the Israel-Hamas war in October. The US said there had been 27 attacks in the Red Sea since mid-November.
The group, which is backed by Iran, has been using drones and rockets against foreign-owned vessels transporting goods through the strait of Bab al-Mandab - a 20-mile wide channel that splits Eritrea and Djibouti on the African side and Yemen on the Arabian Peninsula.
Ships usually take this key trade route from the south to reach Egypt's Suez Canal further north.
The Houthi group has declared its support for Hamas and has said it is targeting ships travelling to Israel, although it is not clear if all the ships that have been attacked were actually heading to Israel.
Who are the Houthi rebels attacking Red Sea ships?
US and UK strike Houthi rebel targets in Yemen
Many companies are now sending vessels around the Cape of Good Hope instead, a route that adds at least 10 days of travel.
Currently, about a quarter of the world's shipping containers are being diverted.
According to the White House, about 15% of global seaborne trade passes through the Red Sea. This includes 8% of global grain, 12% of seaborne oil and 8% of the world's liquified natural gas.
The boss of shipping giant Maersk told the BBC that "significant disruption" to global trade was already being felt "down to the end consumer".
Prior to the military strikes on Thursday, Maersk chief executive Vincent Clerc had called for a "stronger mobilisation" to repel the attacks, which he said would lead to higher prices for customers.Prior to the military strikes on Thursday, Maersk chief executive Vincent Clerc had called for a "stronger mobilisation" to repel the attacks, which he said would lead to higher prices for customers.
Currently, about a quarter of the world's shipping containers are being diverted from the area. Earlier this week, Tesco boss Ken Murphy warned the disruption "could inflate the cost of some items but we just don't know at the minute".
According to the White House, around 15% of global seaborne trade passes through the Red Sea. This includes 8% of global grain, 12% of seaborne oil and 8% of the world's liquified natural gas. Next, Ikea and Danone have said they are expecting delays in receiving goods too.
Currently traffic is having to take the longer route around Africa's Cape of Good Hope. Oil prices also rose on Thursday after Iran seized a tanker off the coast of Oman. The oil tanker was heading for Turkey when armed men ordered it to sail to an Iranian port.
Tesla, the US electric car-maker, said that it would suspend most of its production at a factory in Berlin after the attacks in the Red Sea led to a shortage of components. On Friday, the price of Brent crude - the international benchmark for oil prices - rose by 2% to $78.94 per barrel while US West Texas crude increased by 2.1% to $73.55.
"The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production in Gruenheide," it said. The BBC understands the Treasury has modelled scenarios including crude oil prices rising by more than $10 a barrel and a 25% increase in natural gas.
US and UK hint at action after largest Red Sea attack The government is concerned ongoing attacks on shipping in the Red Sea could further shrink the UK economy if disruption goes on to affect tanker traffic more widely.
Red Sea attacks: 'Our costs have jumped 250%' Iranian-backed Houthi rebels in Yemen have said the attacks are in sympathy with Palestinian suffering in Gaza and the group's leader Abdel-Malek al-Houthi said on Thursday that they "will not back down".
What do Red Sea assaults mean for global trade? As a result of the attacks, Maersk and several of the world's other major shipping lines have been avoiding a key route for global trade as they prioritise the safety of their crews.
Earlier this week, Tesco boss Ken Murphy said the disruption "could inflate the cost of some items but we just don't know at the minute".
Next, Ikea and Danone have also said they are expecting delays in receiving goods.
Maersk boss Vincent Clerc says consumers will see higher prices because of the Red Sea attacks
The Red Sea is "one of the most important arteries of global trade", Mr Clerc told the BBC. Even if it is opened up quickly again it will "probably take a few months more" to get back to normal, he added.
For the shipping industry there is currently no alternative. "We don't really see another solution right now than to sail south of the Cape of Good Hope," he said.
Making the Red Sea safe again will require a better understanding of the threat, he said.
He explained that when one of his company's ships, the Maersk Hangzhou, was attacked it was outside the perceived danger zone and was targeted with different weapons to previous attacks.
"The level of threat is actually evolving," he said.
The Houthis' military capabilities and the political difficulties of interventions are making it difficult for the military coalition to end the threat to global trade.
Iranian-backed Houthi rebels in Yemen said the attacks are in sympathy with Palestinian suffering in Gaza and the group's leader Abdel-Malek al-Houthi said on Thursday that they "will not back down".
Commercial shipping has been targeted at least 27 times since mid-November, according to the US military.
As a result, Maersk and several of the world's other major shipping lines have been avoiding a key route for global trade as they prioritise the safety of their crews.
"We have ships that are being shot at. We have colleagues whose lives are at risk when this happens and we can simply not justify sailing through these danger zones the way the situation is right now," Mr Clerc said."We have ships that are being shot at. We have colleagues whose lives are at risk when this happens and we can simply not justify sailing through these danger zones the way the situation is right now," Mr Clerc said.
He said the longer route around Africa was sucking capacity out of the global shipping system in the short term, adding anything from seven days to two weeks to a ship's journey, as well as costing $1m more in fuel alone. He said the longer route around Africa was sucking capacity out of the global shipping system in the short term, adding anything from seven days to two weeks to a ship's journey, as well as costing $1m (£783,000) more in fuel alone.
"It will be more costly, it will be slower, but it can be coped with in the long run.
"Shipping prices have gone up as a result because of an anticipation of congestion and fear of lacking capacity in the short run," Mr Clerc added.
Rates for moving cargo by sea reached record highs during the pandemic but, along with shipping companies' profits, have fallen significantly over the last 18 months or so.Rates for moving cargo by sea reached record highs during the pandemic but, along with shipping companies' profits, have fallen significantly over the last 18 months or so.
However, the industry has spare capacity partly because the higher cost of living in much of Europe and the US over the last two years has led to a fall in consumer demand.However, the industry has spare capacity partly because the higher cost of living in much of Europe and the US over the last two years has led to a fall in consumer demand.
In Bahrain on a tour of the Middle East this week, US Secretary of State Antony Blinken said extra costs get "translated into higher prices for people, for everything from fuel to medicine to food".In Bahrain on a tour of the Middle East this week, US Secretary of State Antony Blinken said extra costs get "translated into higher prices for people, for everything from fuel to medicine to food".
"And so it's having a real impact on people around the world in their daily lives.""And so it's having a real impact on people around the world in their daily lives."
US Secretary of State Antony Blinken commented on the threat to the global economy by attacks in the Red Sea
MSC, Maersk, CMA-CGM and Hapag-Lloyd are among the biggest shipping lines to have increased their rates.
Those costs are already being passed on to consumers in the form of higher prices "which in these times of inflation is really something that we need to try to avoid", Mr Clerc said.
"The magnitude and the impact that it will have will heavily depend on the length of the crisis, the length during which the trading route is disrupted.
"A lot of our infrastructure and our economy relies on the services that we provide and the traffic we have in this region. We need to see this restored, we need to see safety restored as fast as possible."
Related TopicsRelated Topics
Tesla
Global supply chain managementGlobal supply chain management
EconomyEconomy
Shipping containersShipping containers
Global tradeGlobal trade
HouthisHouthis
Shipping industryShipping industry
TradeTrade