Red Sea crisis will lead to oil price hike: World Economic Forum chief
Business
Closure of the Suez Canal would hurt the global supply chain
(Web Desk) - Houthi attacks on merchant ships in the Red Sea would negatively impact oil-importing countries, where a $10-20 increase in oil prices would be harmful to its economy, according to World Economic Forum (WEF) president Borge Brende.
The ongoing tensions in the Red Sea due to recurrent attacks on merchant ships by Yemen's Houthi rebels have a negative impact on the global supply chain and would lead to a $10-20 increase in oil prices for oil-importing countries.
In an interview, Brende stated that the closure of the Suez Canal would hurt the global supply chain and hoped that the Houthi attacks in the region would stop very soon.
He made the remarks as the 54th edition of the annual World Economic Forum (WEF) meeting is set to begin today in the picturesque city of Davos in Switzerland.
During the interview, Brende highlighted that trade growth came down to 0.8 per cent last year compared to 3.4 per cent.
He, however, expressed optimism that global trade will "pick up a bit" this year amid the Red Sea crisis.
"But it doesn't take much to also have a negative impact on this if we close the Red Sea.
The fact that even closing the Suez Canal for weeks will also have a very negative impact on the global supply chain.
So, a lot is at stake. We also know that this has an impact on oil prices and for big oil-importing countries like, for example, India, where a $10-20 increase in oil prices will have very negative effects on the economy," he said.
