New Delhi: The ongoing conflicts in the Middle East are beginning to have a significant impact on global trade. The Strait of Hormuz, a crucial maritime corridor adjacent to Iran, has nearly been shut down, affecting shipping traffic in the Red Sea near Saudi Arabia and Yemen. Previously, vessels traveling between Europe and Asia would use the Suez Canal for a direct and shorter route, but now many are opting for a longer journey around the African continent to avoid the escalating tensions.

70% of Cargo Now Diverted via Africa
Due to fears of Iranian-backed Houthi rebels in the Red Sea, 70% of cargo ships are now taking the route around Africa. The number of vessels passing the Cape of Good Hope has tripled over the past three years. Between March 1 and April 24 of this year, an average of 20 ships passed through daily, compared to just six in 2023. The daily traffic through the Red Sea and Suez Canal has dropped from 18 ships to just five, causing significant losses for countries reliant on the Suez route.

Extended Transit Times
Previously, goods transported via the Suez Canal would arrive in 21 days. Now, taking the longer route around Africa's Cape of Good Hope can take between 50 to 55 days. Egypt is facing substantial revenue losses as the number of ships passing through the Suez has decreased, leading to a projected 60% drop in revenue from 2023 to 2024.

Increased Fuel Costs
The cost of fuel for shipping has risen by 30% to 50% due to the longer routes. To maintain consistent supply chains, shipping companies are deploying 10% to 20% more vessels. Meanwhile, African ports are benefiting from this shift; for instance, Morocco's Tangier Med Port handled 11 million containers in 2025, an 8.4% increase from the previous year. Saudi Arabia's Jeddah Port is emerging as a new hub, receiving goods that are then transported via highways to Sharjah, Bahrain, and Kuwait.