Current Middle East Tensions Have Severe Economic Consequences
The ongoing situation in the Middle East has severe economic repercussions. The first direct impact on Tunisian businesses and consumers is the price of imported goods transported by sea.
The cost of insuring a ship crossing the Red Sea has more than doubled since the beginning of September. Some insurers have gone further, suspending their coverage as the risk of Houthi attacks on commercial vessels increases, particularly with the Lebanese escalation.
The additional war risk premiums, paid when ships navigate the Red Sea, have reached 2% of the ship's value for a single transit, up from 0.7% at the beginning of the month, following the attack on the Greek-operated tanker Sounion, which was on fire for weeks. So far, no claims have been made for the ship, estimated to be worth $80 million.
The Houthis have declared that they will attack ships with links to the United Kingdom or the United States, or those that have stopped at Israeli ports, although other ships have also been targeted, increasing the dangers and costs involved. War insurance policies are provided by a consortium of insurers, highlighting the extent of the risks involved.
For Tunisia, this means disruptions to supply chains for certain products and higher prices. This is anything but good news for local consumers.
