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Planet Money

Mid-East conflict escalation, two indicators

Jan 17, 2024
16:20
Snipd AI
The podcast discusses two indicators of the economic disruptions caused by the war in Gaza - the impact on global shipping routes through the Red Sea and the potential escalation effects on the region's oil exports. It explores the role of Houthi rebels in attacking container ships, the re-routing of shipping lines, and the ripple effects on delivery time and cost. Additionally, it examines the correlation between the conflict escalation and rising oil prices, as well as the implications for other industries, like food.
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Podcast summary created with Snipd AI

Quick takeaways

  • The attacks by Houthi rebels in the Red Sea have increased war risk insurance costs for shipping companies, resulting in extra fees and delays in the global supply chain.
  • The escalation of conflict in the Middle East poses risks of higher oil prices and increased food prices, potentially leading to food insecurity, sickness, and political instability worldwide.

Deep dives

Ripple Effects of Conflict: Red Sea and Suez Canal

The conflict in the Middle East, particularly between Israel and Gaza, has led to various economic ripple effects in the Red Sea and the Suez Canal. The attacks by Houthi rebels in the Red Sea, including hijacking vessels and attacking commercial ships, have increased war risk insurance costs for shipping companies. As a result, shipping companies have started charging extra fees or rerouting their vessels, which adds significant costs and delays to the supply chain. These higher costs may potentially lead to increased oil prices and more expensive consumer goods.

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