The International Monetary Fund (IMF) has reported a significant rise in shipping costs due to recent tensions in the Red Sea. According to the IMF's analysis of regional economic prospects for the Middle East and Central Asia, The conflicts and subsequent security concerns have disrupted maritime trade in the Middle East and North Africa region. This disruption has particularly affected shipping routes from China to the Mediterranean, with container shipping costs skyrocketing by approximately 300%.

Before the escalation of tensions, the Red Sea served as a crucial global trade corridor, with about 15% of international trade and 30% of global container trade passing through the Suez Canal. However, attacks on commercial ships passing through the Bab al-Mandab Strait, initiated by the Houthis in Yemen in November 2023, have raised security concerns and led to a surge in marine insurance premiums.

As a result, the cost of shipping a standard 40-foot container from China to the Mediterranean has increased from around $1,000 to over $4,000 since the onset of the conflicts until last March. This rise in shipping costs has significantly impacted regional trade, with trade through the Suez Canal declining by more than 50% from November to the end of February.