"Red Sea and Suez Canal: Key to Global Trade"

"Red Sea and Suez Canal: Key to Global Trade"

Context: Ever since the Israel-Hamas conflict broke out in October, there have been a spate of attacks on ships plying on the Red Sea. Relevance: GS II- International Relations & GS III- Trade

Red Sea:

  • The Red Sea is a seawater inlet of the Indian Ocean, lying between Asia and Africa.

  • It is bounded by northeastern Africa to the west, and the Arabian Peninsula to the east.

  • It separates two great blocks of Earth’s crust—Arabia and North Africa.

  • In the northern side the Red Sea splits into two parts, the Gulf of Suez to the northwest and the Gulf of Aqaba to the northeast.

Suez Canal:

  • It is a canal that connects Mediterranean Sea to Indian Ocean through the city of Suez in Egypt.

  • It is one of the most busiest and important shipping route of the world.

  • Till 1956, the canal was possessed by the British power

  • In 1956, it was Nationalised by Egypt. 

  • At present, it is an international waterway.

Importance of Red Sea:

  • Trade: The red sea is an important trading route connecting Europe with Asia. About 15% of global trade passes through this sea.

  • Resource Rich: The sea is very much rich in vital resources like Petroleum, sulphur, phosphates as well as many other critical resources.

  • India-Middle East-Europe Economic Corridor(IMEC): The project IMEC agreed on in G20 summit this year will connect Asia, Middle East and Europe through the Red Sea.

Importance of Suez Canal:

  • This canal enables direct shipping of goods between Asian and European countries.

  • Volume of trade: – 12% of world trade, 7% of world’s oil, 30% container – ship daily.

  • The canal helps in reducing the cost of fuel in ships for trading between the continents of Asia and Europe.

  • The canal’s location makes it a key link for shipping crude oil and other hydrocarbons from Arab and Central Asian countries to Europe and North America.

Importance of the Red Sea and Suez canal for India:

  • Trade worth $200 billion of India to/from North America, South America and Europe is carried out using this route.

  • Energy security: The route is vital for India’s crude oil imports from Latin America.

  • Strategic importance: the area helps Indian Navy to project it’s presence and participate in global naval operations.

Recent challenges in the region due to Israel-Hamas conflict:

  • Threat to the safety and security of safe passage: Though It is not certain which elements are behind the attacks, over a dozen of them the suspicion falls on the Iran-backed Houthi rebels of Yemen who have stepped up attacks on ships ostensibly with Israeli links in the Red Sea in support of Palestine amid the Israel-Hamas conflict.

  • Disruption of the global supply chain, considering that the bigger shipping companies have begun to avoid one of the world’s busiest shipping lanes, diverting journeys away from the Red Sea, and taking a much longer and more costly route via the Cape of Good Hope. 

  • Of immediate concern to India has been the drone strike on a chemical tanker, the Chem Pluto, carrying crude oil to the New Mangalore port from the Al Jubail port in Saudi Arabia, which was struck about 217 nautical miles from Porbandar. 

  • A fear of spillover effect of the war to the Arabian sea area is constantly on a rise.

Way forward:

  • Fair use of International platform like UN: Countries like USA need to sideline it’s self interest and ensure fair use of its veto power to stop the war.

  • Negotiations with the miltant groups like Houthi Rebels.

  • Building up the security forces in the region.

Advait IAS