Mid-East conflict escalation, two indicators
As conflict in the Middle East spreads outwards from Israel and Gaza, the economic impacts reach globally already.
Attacks on commercial ships in the Red Sea, rocket attacks by Hezbollah and U.S. airstrikes in Yemen, trade routes blocked, oil flows disrupted, we are starting to see the interconnected economic ripples spreading.
Our colleagues across NPR are closely covering the human toll and political dynamics of the war in Gaza; on today's show, we look at two indicators of the economic disruptions and try to trace how far they will reach.
We start in the Red Sea, a crucial link in the global supply chain connecting to the Suez Canal, with around 15% of the world's shipping passing through it. This includes oil tankers and massive container ships transporting everything from microchips to furniture. With Houthi rebels attacking container ships in solidarity with Palestinians in Gaza, shipping lines are re-routing, adding time and cost to delivery. We look at how ocean shipping is a web more than a chain of links, and try to see which parts of the web can take up more strain as the Red Sea and the Suez Canal become too dangerous to pass.
Then, we'll consider what escalation could mean for the region's most important export: oil. Five steps of escalation each mean a ratcheting up of costs that knock on to other industries, like food. Some prices are likely to rise faster than others, though.
The reporting in today's episode comes from Planet Money's daily show, The Indicator from Planet Money, which explains a different aspect of the economics in the news each weekday in 10 minutes or less. Subscribe here or here for Apple / Spotify.
These Indicator episodes were hosted by Darian Woods, Paddy Hirsh, Wailin Wong and Adrian Ma. They were originally produced by Julia Ritchey and Corey Bridges with engineering by Maggie Luthar and Josh Newell. They were fact-checked by Sierra Juarez and edited by Kate Concannon.
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Music: NPR Source Audio - "Future" and "Sunshine And My Grind"