The increase in oil prices .. The decline in economic growth .. The high cost of insurance .. Direct effects of the closure of Bab al MandabTruth Consultancy
“The closure of the Bab al-Mandab Strait is a real dangerous to global trade flows, especially oil,” said Reda Mosallam, an economist. “Closing the strait stops oil supplies coming from Gulf countries, major worldwide oil exporters , leading to higher oil prices.”
He explained that the first direct repercussions of stopping the passage of oil tankers across the Bab al-Mandab Strait is the increase in shipping costs due to the use of the road of Cape of Good Hope instead of Bab al-Mandab and the Suez Canal, an increase in the distance of ships sailing from the ports of the Middle East to Western Europe by 6 thousand nautical miles, which requires, in addition to the increasing the time spent, the increase in fuel consumption during the voyage of the vessel.
The closure will also lead to congestion in other sea lanes and the high cost of marine insurance. According to estimates by the US College of Naval Studies, the additional international transport cost of Bab al-Mandab will amount to about $ 45.6 million per day.
It is estimated that every interruption of the global supply of oil by about one million barrels per day, oil prices increase by about $ 5 a barrel, which will directly reflect the price of a barrel to reach $ 80 in the current phase, up from $ 74 yesterday.