Miller, Colleagues Send Letter to Biden on the Impact of Recent Houthi Attacks on Global Trade
WASHINGTON, D.C. - Today, Congresswoman Carol Miller (R-WV) led a letter to President Joe Biden urging him to neutralize recent threats and attacks from an Iranian-backed militia, known as the Houthis, on trade cargo ships in the Red Sea near Yemen. The letter also urges the Biden Administration to work with our international partners to secure our trade lanes. These attacks have caused many major trade companies to redirect their cargo shipments which delays arrivals and increases costs for consumers.
Click HERE for the full letter.
Joining Congresswoman Miller in sending the letter are Representatives Guy Reschenthaler (R-PA), Chuck Fleischmann (R-TN), Randy Weber (R-TX), Cory Mills (R-FL), Mike Carey (R-OH), Nick LaLota (R-NY), August Pfluger (R-TX), Doug LaMalfa (R-CA), and Claudia Tenney (R-NY).
On the attacks by Houthi’s on the global trade market in the Red Sea:
While the world remains stunned by the senseless violence committed by Iran-backed militias in Israel, Iran has stepped up their international attacks by having the Houthis, an Iran-backed militia group in Yemen, send shockwaves through the global trade market by attacking global shipping in the Red Sea, near the Suez Canal. The Suez Canal and Red Sea provide passage to about 12% of the world’s seaborne oil and 8% of its liquefied natural gas. As much as 8.2 million barrels per day of crude oil and oil products traversed the Red Sea from January to November of 2023 and 20% of all shipping containers globally rely on safe passage through it. The route through the Suez Canal is also the most direct route used to ship goods between Europe and Asia.
On the impact of Houthi’s attacks on the global supply chain and rising shipment times and costs:
These attacks have forced trade giants, such as BP and Maersk, to suspend passage through the Suez Canal and opt to direct their ships around the Cape of Good Hope in South Africa, a substantially longer and more expensive journey. Experts have estimated that traveling from Asia to Northern Europe around the Cape of Good Hope extends journey times from 31 to 40 days. This amounts to tens of millions of dollars being unnecessarily spent by companies to travel around the Cape of Good Hope, just to avert potential violence in the Suez Canal. The cost of this journey is unfairly passed on to consumers through increased prices. The Brent benchmark, a measure used to price more than three-quarters of the world’s traded oil, shows crude prices rose 1.6% within the first week of the Houthi attacks. Trade experts around the world have predicted substantial ripple effects across the global supply chain if the threat in the Red Sea is not neutralized within days.
On the impact of trade relations with Egypt and the stability of global trade:
We are cautiously optimistic that your initiative to spearhead the multinational task force to protect commercial passage will be successful and we compel the administration to take all necessary steps to ensure safe passage and encourage foreign nations to engage as well, especially the Kingdom of Saudi Arabia and the United Arab Emirates. The Egyptian economy relies on the Suez Canal for 25% of its earnings and has already seen traffic drop 35%, worsening the financial crisis the country was already seeing. Further disruptions to trade through the Suez Canal could send Egypt, a key partner in ensuring peace in Israel and Gaza, into chaos. It is imperative that the Houthi violence is nullified in order to ensure the stability of global trade and the global economy. We look forward to quick and decisive action regarding this threat.
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