Maersk noted that while the Peak Season Surcharge was reduced recently, it has been increased again to help cover the additional costs due to the changes. Image for representation purposes only. File
| Photo Credit: C.V. Subrahmanyam

Global shipping major Maersk estimates an industry wide capacity loss of 15-20% in the Far East to North Europe and Mediterranean markets, essentially between Asia and Europe, during the second quarter of this financial year. This is due to the Red Sea crisis, which it said has intensified over the last few months.

“To safeguard our crew, vessels, and cargo, we are rerouting around the Cape of Good Hope for the foreseeable future. However, the risk zone has expanded, and attacks are reaching further offshore. This has forced our vessels to lengthen their journey further, resulting in additional time and costs to get your cargo to its destination for the time being,” Maersk said in its latest advisory issued on May 6.

Also Read | Can the IMEC address the Red Sea crisis?

The effects of the situation in the Red Sea are widening and continuing to cause industry-wide disruptions, it noted.

Maersk hikes charges

There have been a series of missile and drone attacks on commercial shipping belonging to entities linked to Israel by Houthi rebels from Yemen since the launch of the Israeli offensive in Gaza.

Elaborating on the effects of the Red Sea situation, Maersk said they include bottlenecks and vessel bunching, as well as delays and equipment and capacity shortages. In this regard, Maersk has leased more than 125,000 additional containers.

The company has informed customers that they will see relevant surcharges on the latest invoices. “These are to offset the costs of the longer journeys, increased sailing speed, and additional fuel costs. For example, we are currently using 40% more fuel per journey and charter rates are currently three times higher, often fixed for five years,” it stated.

Maersk noted that while the Peak Season Surcharge was reduced recently, it has been increased again to help cover the additional costs due to the changes.

Securing the Red Sea

In response to the escalation in missile and drone attacks from Houthi held areas, U.S. Secretary of Defence Lloyd J. Austin announced the establishment of Operation Prosperity Guardian on December 18. The operation is an “important new multinational security initiative under the umbrella of the Combined Maritime Forces and the leadership of its Task Force 153, which focuses on security in the Red Sea.”

India, though it has not joined the U.S.-led initiative, has stepped up its presence in the North Arabian Sea, Horn of Africa, and Gulf of Aden to provide aid to ships under fire as well as to deal with the rise in Somalian piracy. At the height of the tensions a couple of months back, as many as 12 frontline warships were deployed in the region for maritime security operations.

From mid-December till March 23, as part of Phase-2 of the Indian Navy’s of Operation Sankalp over 5,000 personnel were deployed at sea, over 450 ship days (with over 21 ships deployed). Maritime surveillance aircraft logged 900 hours of flying to address threats in the maritime domain, then Navy Chief, now retired, Adm R. Hari Kumar told the media.

Image used for representative purpose only.
| Photo Credit: AP

Yemen’s Houthis said on April 27 their missiles hit the Andromeda Star oil tanker in the Red Sea, as they continue attacking commercial ships in the area in a show of support for Palestinians fighting Israel in the Gaza war.

The ship’s master reported damage to the vessel, British maritime security firm Ambrey said.

Houthi spokesman Yahya Sarea said the Panama-flagged ship was British-owned, but shipping data shows it was recently sold, according to LSEG data and Ambrey. Its current owner is Seychelles-registered. The tanker is engaged in Russia-linked trade. It was en route from Primorsk, Russia, to Vadinar, India, Ambrey said.

Also read: How has Red Sea trouble impacted India? | Explained

The Red Sea crisis

Iran-aligned Houthi militants have launched repeated drone and missile strikes in the Red Sea, Bab al-Mandab Strait and Gulf of Aden since November, forcing shippers to re-route cargo to longer and more expensive journeys around southern Africa and stoking fears the Israel-Hamas war could spread and destabilize the Middle East.

The attack on the Andromeda Star comes after a brief pause in the Houthis’ campaign that targets ships with ties to Israel, the United States and Britain.

The USS Dwight D. Eisenhower aircraft carrier sailed out of the Red Sea via the Suez Canal on April 26 after assisting a U.S.-led coalition to protect commercial shipping. The Houthis on Friday said they downed an American MQ-9 drone in airspace of Yemen’s Saada province.

H&M CEO Daniel Erver said that the extent of the delay would vary from country to country, but could be around two weeks in some markets. File
| Photo Credit: Mike Segar

H&M, the world’s second-biggest listed fashion retailer, postponed the start of some Spring/Summer campaigns to adjust to shipping delays caused by the Red Sea crisis, CEO Daniel Erver said on March 27.

“We have made some short-term adaptations on the starting date and the launch date of campaigns,” Mr. Erver told Reuters in an interview, adding the impact on what is available to customers was minor.

He said the extent of the delay would vary from country to country but could be around two weeks in some markets.

Shipping firms have avoided the Suez Canal as militant attacks have led container vessels to be re-routed around the southern tip of Africa, adding to freight costs and delaying the arrival of clothes and shoes in Europe from factories in Asia.

H&M said in connection with its first quarter report on March 27 that it was monitoring developments in the Red Sea and has acted to minimise any impact on the company’s product availability, freight costs and stock levels.

Mr. Erver told Reuters the retailer has taken steps to limit disruption, such as asking suppliers to ship products earlier than usual and accelerating plans to shift production closer to customers.

Union Minister of Commerce & Industry Piyush Goyal. File
| Photo Credit: PTI

Commerce and Industry Minister Piyush Goyal has exuded confidence that during this fiscal, the country’s goods and services export numbers will be at the same level; as it was last year despite slowdown and uncertainties in the global trade.

He also said that the government measures such production-linked incentives schemes and focus on high-quality goods and services would help in containing the country’s trade deficit. So our trade deficit will be significantly lower than last year.

“I am happy to share with you that we close the current year in March at the same level as last year. We have a little bit of an adjustment between goods and services, but collectively we will be at the same level as last year, which will be a very, very significant achievement given that most developing countries and less developed countries are seeing a fall in their international trade,” Mr. Goyal told PTI in an interview.

Cumulatively, the country’s merchandise exports in April-January 2023-24 contracted by 4.89% to $353.92 billion. The estimated value of services exports during the ten-month period stood at $84.45 billion. In 2022-23, India’s goods and services exports stood at $776 billion.

The war between Russia and Ukraine; Israel-Hamas is impacting global supply chains and the Red Sea crisis has led to significant increase in transportation costs and delay as Indian exporters have to send their consignments through the Cape of Good Hope, encircling Africa.

The Minister said that India saw a scorching pace of growth in its international trade in the years between 2021 and 2023.

“We grew by 55% over a period of two years, both in goods and in services’. It went up to $776 billion in only two years. And with growth on both goods and services, we could clearly see that this year is going to be one where we will have to consolidate the gains,” he said.

When asked if the government is thinking of extending some kind of support measures to exports to deal with the crisis, he said the approach of being dependent on the government to resolve all the problems is something that now Indian industry also does not really desire.

“We have been able to change the thinking to bring the confidence in the Indian exporters that we should stand on our own feet. We should not be dependent on the crutches of the government. And I’m glad to share with you that they do not want the crutches of support anymore.”

“What we are doing is of course working through the military and the Navy to see that we can give protection to the ships traversing the Red Sea. We are also continuously in dialogue working with the countries in that region and with our own exporters, and very, very mindful and watchful of the situation,” he said.

When asked about the World Trade Organisation (WTO), the Minister said it is “very” relevant and will continue to increase in its relevance as the world needs a rules-based trading system, which is transparent.

“The understanding that is gradually creeping in that we will not allow ourselves to make the same mistakes that countries made in the rural ground, for example, in agriculture,” he said.

Certain quarters of experts are of the view that the WTO is losing its relevance as the member countries are not able to reach consensus on key issues.

On March 1, the talks at the WTO’s Ministerial conference ended with no decision on key issues such as finding a permanent solution to public food stockpile and on curbing fisheries subsidies, but the members agreed to further extend the moratorium on imposing import duties on e-commerce trade for two more years.

Armed Houthi followers. Image used for representative purpose only.
| Photo Credit: REUTERS

An attack by Yemen’s Houthi rebels on Friday set off explosions ahead of a Singapore-flagged vessel in the Gulf of Aden, authorities said.

The attack targeted the bulk carrier Propel Fortune, which continued on its way, according to the United States military’s Central Command.

“The missiles did not impact the vessel,” Central Command said. “There were no injuries or damages reported.”

The Houthis did not immediately claim responsibility for the attack. A statement from Houthi military spokesperson Brig. Gen. Yahya Saree was delayed Friday night over “urgent military developments in the theatre of military operations,” according to the rebel-controlled SABA news agency. He was scheduled to speak Saturday.

Early Saturday, the U.S. Navy, allied warships and aircraft shot down 15 bomb-carrying Houthi drones in the Gulf of Aden and the Red Sea, American officials said.

Friday’s explosions came after a Houthi missile struck a commercial ship in the Gulf of Aden on Wednesday, killing three of its crew members and forcing survivors to abandon the vessel.

It was the first fatal strike in a campaign of assaults by the Iranian-backed group over Israel’s war on Hamas in the Gaza Strip. The Houthis describe the attacks as trying to pressure Israel into stopping the war, but their targets increasingly have little or nothing to do with the conflict.

Other recent Houthi actions include an attack in February on a fertiliser-carrying cargo ship, the Rubymar, which sank on Saturday after drifting for several days, and the downing of an American drone worth tens of millions of dollars.

The U.S. also conducted airstrikes Friday that it said destroyed two Houthi truck-mounted anti-ship missiles in Yemen. The rebels similarly did not directly acknowledge any destruction from those strikes.

The Houthis have held Yemen’s capital, Sanaa, since 2014. They’ve battled a Saudi-led coalition since 2015 in a long-stalemated war there. Since the U.S. began its airstrike campaign in January, the Houthis have acknowledged the killing of at least 22 of its fighters. One civilian has also been reported killed.

This picture taken on February 27, 2024 shows a speed boat and the Rubymar cargo ship (L) sinking off the coast of Yemen. Rubymar, a Belize-flagged, British-registered and Lebanese-operated cargo ship carrying combustible fertilizer, was damaged in a missile strike on February 25 claimed by the Iran-backed Houthi rebels.
| Photo Credit: AFP

A ship attacked by Yemen’s Houthi rebels has sunk in the Red Sea after days of taking on water, officials said on March 2, the first vessel to be fully destroyed as part of their campaign over Israel’s war against Hamas in the Gaza Strip.

The sinking of the Rubymar comes as shipping through the crucial waterway for cargo and energy shipments moving from Asia and the Middle East to Europe has been affected by the Houthi attacks.

Already, many ships have turned away from the route. The sinking could see further detours and higher insurance rates put on vessels plying the waterway — potentially driving up global inflation and affecting aid shipments to the region.

The Belize-flagged Rubymar had been drifting northward after being attacked on Feb. 18 in the Bab el-Mandeb Strait, a crucial waterway linking the Red Sea and the Gulf of Aden.

Yemen’s internationally recognized government, as well as a regional military official, confirmed the ship sank. The official spoke on condition of anonymity as no authorization was given to speak to journalists about the incident.

The Rubymar’s Beirut-based manager could not be immediately reached for comment.

Yemen’s exiled government, which has been backed by a Saudi-led coalition since 2015, said the Rubymar sank late on March 1 as stormy weather took hold over the Red Sea. The vessel had been abandoned for 12 days after the attack, though plans had been made to try and tow the ship to a safe port.

The Iran-backed Houthis, who had claimed the ship sank almost instantly after the attack, did not immediately acknowledge the ship’s sinking.

The U.S. military’s Central Command previously warned the vessel’s cargo of fertilizer, as well as fuel leaking from the ship, could cause ecological damage to the Red Sea.

Explained | Who are Yemen’s Houthis?

Since November, the rebels have repeatedly targeted ships in the Red Sea and surrounding waters over the Israel-Hamas war. Those vessels have included at least one with cargo bound for Iran, the Houthis’ main benefactor, and an aid ship later bound for Houthi-controlled territory.

Despite over a month of U.S.-led airstrikes, Houthi rebels remain capable of launching significant attacks. That includes the attack on the Rubymar and the downing of an American drone worth tens of millions of dollars. The Houthis insist their attacks will continue until Israel stops its combat operations in the Gaza Strip, which have enraged the wider Arab world and seen the Houthis gain international recognition.

However, In recent days, there has been a slowdown in attacks. The reason for that remains clear.

U.S. has emerged as Europe’s top supplier of crude, diesel and LNG as the Red Sea crisis prolongs.
| Photo Credit: Reuters

The United States has taken the top spot as Europe’s supplier of crude oil, diesel, and liquefied natural gas (LNG) in recent months, capitalising on reduced imports from east of Suez caused by shipping disruptions in the Red Sea.

“The U.S. is in top position on basically all the key commodities that Europe needs to buy,” Kpler crude analyst Viktor Katona said at an industry event in London.

The U.S. shipped 2.17 million barrels per day (bpd) of crude oil to Europe so far this month, according to Kpler data. Exports of diesel stood at 207,000 bpd in the same period, outpacing Saudi imports of around 201,000 bpd. No LNG cargoes are currently in the Red Sea, Kpler data show. QatarEnergy, one of the world’s largest exporters of LNG, said in January that it had stopped sailing via the Red Sea citing security concerns.

The United States became the world’s largest LNG exporter last year, and its exports are expected to double by the end of the decade. Shipping risks have escalated due to repeated drone and missile strikes by Yemen’s Houthis in the Red Sea and Bab al-Mandab Strait since November, which they say is in support of Palestinians in Gaza.

A U.S.-led coalition — named Operation Prosperity Guardian was launched back in December to thwart Houthi attacks on commercial shipping, with strikes against Houthi positions in Yemen beginning in January. But, Houthi attacks on shipping have only persisted. Crude and product traffic through the Suez canal is around 30-40% lower than October levels, Kpler said.

“This idea that the Atlantic basin increasingly starts to trade within itself…is very much represented by the fact that the U.S. has become the largest player in the European market,” Mr. Katona said.

The U.S. and U.K. struck 18 Houthi targets in Yemen on February 24, answering a recent surge in attacks by the Iran-backed militia group on ships in the Red Sea and Gulf of Aden, including a missile strike this past week that set fire to a cargo vessel.

According to U.S. officials, American and British fighter jets hit sites in eight locations, targeting missiles, launchers, rockets, drones and air defence systems. The officials spoke on condition of anonymity in order to provide early details of an ongoing military operation.

This is the fourth time that the U.S. and British militaries have conducted a combined operation against the Houthis since January 12. However, the U.S. has also been carrying out almost daily strikes to take out Houthi targets, including incoming missiles and drones aimed at ships, as well as weapons that were prepared to launch.

The U.S. F/A-18 fighter jets launched from the USS Dwight D. Eisenhower aircraft carrier, which is currently in the Red Sea, officials said.

“The United States will not hesitate to take action, as needed, to defend lives and the free flow of commerce in one of the world’s most critical waterways,” said US Defence Secretary Lloyd Austin. “We will continue to make clear to the Houthis that they will bear the consequences if they do not stop their illegal attacks.”

The Houthis denounced the “US-British aggression” and vowed to keep up its military operation in response. “The Yemeni Armed Forces affirm that they will confront the US-British escalation with more qualitative military operations against all hostile targets in the Red and Arabian Seas in defence of our country, our people and our nation,” it said in a statement.

The U.S., U.K., and other allies said in a statement the “necessary and proportionate strikes specifically targeted 18 Houthi targets across 8 locations in Yemen” that also included underground storage facilities, radar and a helicopter.

UK Defence Secretary Grant Shapps said RAF Typhoon jets engaged in “precision strikes” aimed at degrading Houthi drones and launchers. Shapps said it came after “severe Houthi attacks against commercial ships in the Red Sea and Gulf of Aden, including against the British-owned MV Islander and the MV Rubymar, which forced the crew to abandon ship.” It’s the fourth time Britain has joined in the US-led strikes.

The strikes have support from the wider coalition, which includes Australia, Bahrain, Canada, Denmark, the Netherlands and New Zealand.

Restoring stability in the Red Sea

President Joe Biden and other senior leaders have repeatedly warned that the U.S. won’t tolerate the Houthi attacks against commercial shipping. But the counterattacks haven’t appeared to diminish the Houthis’ campaign against shipping in the region, which the militants say is over Israel’s war against Hamas in the Gaza Strip.

“Our aim remains to de-escalate tensions and restore stability in the Red Sea, but we will once again reiterate our warning to Houthi leadership: we will not hesitate to continue to defend lives and the free flow of commerce in the face of continued threats,” said the Saturday statement.

The Houthis have launched at least 57 attacks on commercial and military ships in the Red Sea and Gulf of Aden since November 19, and the pace has picked up in recent days.

“We’ve certainly seen in the past 48, 72 hours an increase in attacks from the Houthis,” Pentagon spokeswoman Sabrina Singh said in a briefing on Thursday. And she acknowledged that the Houthis have not been deterred.

“We never said we’ve wiped off the map all of their capabilities,” she told reporters. “We know that the Houthis maintain a large arsenal. They are very capable. They have sophisticated weapons, and that’s because they continue to get them from Iran.”

There have been at least 32 US strikes in Yemen over the past month and a half; a few were conducted with allied involvement. In addition, U.S. warships have taken out dozens of incoming missiles, rockets and drones targeting commercial and other Navy vessels.

Earlier on Saturday, the destroyer USS Mason downed an anti-ship ballistic missile launched from Houthi-held areas in Yemen toward the Gulf of Aden, US Central Command said, adding that the missile was likely targeting MV Torm Thor, a US-Flagged, owned, and operated chemical and oil tanker.

The US attacks on the Houthis have targeted more than 120 launchers, more than 10 surface-to-air-missiles, 40 storage and support building, 15 drone storage building, more than 20 unmanned air, surface and underwater vehicles, several underground storage areas and a few other facilities.

The rebels’ supreme leader, Abdul Malik al-Houthi, announced this past week an “escalation in sea operations” conducted by his forces as part of what they describe as a pressure campaign to end Israel’s war on Hamas.

But while the group says the attacks are aimed at stopping that war, the Houthis’ targets have grown more random, endangering a vital waterway for cargo and energy shipments traveling from Asia and the Middle East onward to Europe.

During normal operations, about 400 commercial vessels transit the southern Red Sea at any given time. While the Houthi attacks have only actually struck a small number of vessels, the persistent targeting and near misses that have been shot down by the US and allies have prompted shipping companies to reroute their vessels from the Red Sea.

Instead, they have sent them around Africa through the Cape of Good Hope — a much longer, costlier and less efficient passage. The threats also have led the US and its allies to set up a joint mission where warships from participating nations provide a protective umbrella of air defence for ships as they travel between the Suez Canal and the Bab el-Mandeb Strait.

In Thursday’s attack in the Gulf of Aden, the Houthis fired two missiles at a Palau-flagged cargo ship named Islander, according to Central Command. A European naval force in the region said the attack sparked a fire and wounded a sailor on board the vessel, though the ship continued on its way.

Central Command launched attacks on Houthi-held areas in Yemen on Friday, destroying seven mobile anti-ship cruise missiles that the military said were prepared to launch toward the Red Sea.

Central Command also said Saturday that a Houthi attack on a Belize-flagged ship on February 18 caused a 29 km oil slick and the military warned of the danger of a spill from the vessel’s cargo of fertilizer. The Rubymar, a British-registered, Lebanese-operated cargo vessel, was attacked while sailing through the Bab el-Mandeb Strait that connects the Red Sea and the Gulf of Aden.

The missile attack forced the crew to abandon the vessel, which had been on its way to Bulgaria after leaving Khorfakkan in the United Arab Emirates. It was transporting more than 41,000 tons of fertilizer, according to a Central Command statement.

The Associated Press, relying on satellite images from Planet Labs PBC of the stricken vessel, reported on Tuesday that the vessel was leaking oil in the Red Sea.

Yemen’s internationally recognized government on Saturday called for other countries and maritime-protection organizations to quickly address the oil slick and avert “a significant environmental disaster.

Major shipping lines are avoiding the Suez Canal and are rerouting vessels around the Cape of Good Hope, which has increased time and costs for exporters. File
| Photo Credit: KK Mustafah

Sustained disruptions in the Red Sea route is likely to raise the freight and forwarding (F&F) cost by 25-30% for corporates largely dealing in international trade, a report by credit ratings agency Ind-Ra said on February 9. Moreover, the working capital cycle is likely to aggravate by 15-20 days, and the impact could be higher for sectors such as agriculture and textiles, report said.

Working capital cycle refers to the period between payments made to suppliers and revenue received from sales.

Med-sized entities to be hit

The report also said that pressures on cash flow, although moderate for large entities, will further increase borrowings, especially for sectors such as iron and steel, auto and auto ancillaries, chemicals and textiles, which have seen a year-on-year rise in net leverage in the first half of the current fiscal.

“The challenge is significant for the entities having low value addition therefore thin margins. Although large entities have adequate elbow room to accommodate such incremental cost, delays and disruptions in supply chains will be key factors to watch for,” said Soumyajit Niyogi, Director, Core Analytical Group, Ind-Ra.

For medium-sized entities, he said, the challenge is two-fold, both cost and supply, and consequently on working capital cycle. “These entities have not benefited much from the softening of commodity prices, as free cash flow has remained sluggish for most of them,” he stated.

The initial reaction can be seen in freight rates rising by 150% in the past 45 days, the rating agency said. The route constituted 40% of the total oil imports and 24% of the total exports during April to October 2023, it said.

Major shipping lines have rerouted vessels around the Cape of Good Hope, which has increased time and costs, impacting both exports and imports, as per the report. This detour adds 12-15 days to voyages on a business as-usual basis; however, there could be a further delay owing to any sudden operational challenges, it said.

This detour is directly translating to a higher operational cost, along with freight and insurance and intermittent disruptions on account of ship size and cost dynamics. Although these disruptions have historically been short lived, a swift resolution seems improbable given the geopolitical standing, Ind-Ra said.

Important trade route

As much as 20-25% of India’s foreign trade is routed through the Suez Canal, with key products such as crude oil, auto & auto ancillaries, chemicals, textiles and iron & steel being affected. Indian exports are facing higher shipping costs due to rerouting, leading to reduced export volumes, affecting small and medium-sized enterprises dealing with a high volume of low-value products.

On the import side, vital commodities such as crude oil, fertilisers, and electronic components face inflated costs due to the crisis, leading to higher landed prices and inflationary pressures, impacting various sectors of the Indian economy, the ratings agency said.

Exporters are worried that high freight cost could impact exports. Representational
| Photo Credit: PTI

There is no adverse impact on India’s exports and imports so far due to the Red Sea crisis, an official said. The official said that the transportation cost has increased as the shippers are taking a long route.

“There is no impact in volume terms so far. Only the transportation cost is up. It has risen for all the countries. It has not affected the trade adversely so far. We have to see the long term demand, but it will depend on the EU and the US,” the official added.

These two regions account for over 30% of India’s total exports.

However, exporters said that they are keeping their fingers crossed as due to the significant jump in freight cost, India’s exports may be impacted. The trade data for January will be released by the Commerce Ministry on February 15. In December last year, exports rose marginally by one per cent to $38.45 billion.

Due to the attacks by Yemen-based Houthi rebels on commercial ships, the movement of goods from the Red Sea, the world’s busiest shipping route, has disrupted the global supply chains as vessels have to take long routes for exports and imports.

The immediate ripple effects are seen in increased freight costs, mandatory war risk insurance, and significant delays due to rerouting.

Costs jump due to conflict

According to think tank GTRI, the average container spot rates have more than doubled since early December 2023. Basmati rice exporters face freight costs soaring to $2,000 per 20-tonne container for destinations around the Red Sea, marking a 233% increase, it has said in a report.

Houthi group has been using drones and rockets to target ships, which are transporting goods through the strait of Bab al-Mandab, which is a crucial shipping route connecting the Mediterranean Sea to the Indian Ocean.

The strait, vital for 30% of the global container traffic, has seen increased tensions with various incidents in 2023, including attacks and military manoeuvres by regional and global powers.

India is heavily reliant on this route for trade and energy imports and due to the disruptions, exporters here have to diversify their trade routes.

Strikes have been continuing for many years but escalated this year sharply, with militants now using anti-ship ballistic missiles.

To avoid attacks, most large shipping firms, since December 15 last year, have stopped using the Bab al-Mandab straits for trade with Europe via the Red Sea and Suez Canal. The closure of this route snaps a critical trade link between Europe and India and all of Asia.

Ships going to Europe will now move via a much longer route around the Cape of Good Hope, the bottom tip of Africa. This change increases voyage distances by 40% and raises transportation time and cost.

Change in shipping routes

The two main shipping routes from India to Europe are via Bab-el-Mandeb Strait, Suez Canal and Red Sea; and via Cape of Good Hope, encircling Africa.

The Red Sea route is shorter and faster, making it the preferred option for most shipping companies. It starts from major Indian ports like Mumbai, JNPT, or Chennai, heads westward through the Arabian Sea, enters the Red Sea, and navigates through the Suez Canal into the Mediterranean Sea. From there, ships can reach various European ports depending on their destinations.

India is heavily reliant on this strait for its crude oil, LNG imports and trade with West Asia, Africa, and Europe.

The Cape of Good Hope route is longer and slower than the Suez Canal route, but it avoids the potential for delays or disruptions. It is used for bulk cargo shipments where time is less critical or when political instability in West Asia raises concerns about using the Suez Canal.

It starts from the Indian ports, heads southward across the Indian Ocean, rounds the Cape of Good Hope at the southern tip of Africa, and then sails northward along the west coast of Africa before entering the Mediterranean Sea and reaching European ports.