The Unexpected Opportunity for Russia: BRICS Countries Benefit from Red Sea Conflict
The recent actions of the Houthi rebels in the Red Sea have had far-reaching implications for countries and economies beyond the focal point of the conflicts in Yemen and Gaza.
The Damage to the United States and Its Allies
Attacks in the Red Sea have forced major shipping companies to change their routes. According to The Hill, the United States and its allies are facing the limitations of military intervention while ensuring the safety and efficiency of commercial trade. It is noted that the redirection of cargo ships has inadvertently benefited countries within the BRICS bloc, weakening America’s allies.
As shipping companies reroute their vessels to avoid the Red Sea, Egypt, the United States’ largest ally in the region, has suffered a 50% reduction in revenue through the Suez Canal, exacerbating the country’s currency crisis.
Additionally, as European countries strive to diversify their energy supply amidst tensions with Russia, global trade routes being redirected could inadvertently tighten North America’s control over Europe’s energy security. This shift carries profound implications for transatlantic relations and global energy balance.
Image: A cargo ship flying the Belize flag in the Red Sea, one of the vessels targeted by Houthi forces in February 2024.
BRICS Capitalizes on the Conflict It Doesn’t Directly Participate In
The increased number of ships taking longer and costlier routes around the Cape of Good Hope benefits the economy of South Africa. This route increases the number of port calls in South Africa and enhances the strategic importance of the regional maritime route. The increased flow of trade through the South African seaboard can elevate the country’s position within the BRICS alliance and global trade negotiations.
These redirected shipping routes can also be advantageous for India. As a significant player within the BRICS, India recognizes its position as the crossroads of a burgeoning trade corridor. Rerouting oil and gas shipments around the Cape of Good Hope aligns with India’s energy consumption needs, ensuring a more stable energy supply from Gulf nations, particularly Saudi Arabia. This change reinforces India’s energy security and augments its economic relations with Gulf countries, further strengthening the overall economic power of the BRICS alliance.
On the other hand, China emerges as the major beneficiary of the changing maritime landscape. The instability in the Red Sea helps accelerate Beijing’s efforts to position its Belt and Road Initiative as a safer and more reliable alternative for Asia-Europe trade.
China’s strategic partnerships and investments across Africa and Asia will profit from increased shipping along alternative routes. This solidifies Beijing’s ambition to become the hub of global trade flows.
“The Unexpected Opportunity” for Moscow
According to The Hill, Russia, a country facing multiple Western sanctions, also perceives the disruptions as a stroke of luck. The rerouting of maritime traffic has led to a sharp increase in oil prices, presenting an unexpected opportunity for Moscow.
Higher global oil prices contribute to Russia’s revenues from hydrocarbon exports, providing a financial buffer against economic pressures from sanction measures. This situation demonstrates that political conflicts elsewhere can bolster Russia’s economic recovery capabilities and leverage its position in the global energy market.
In summary, the Houthi attacks in the Red Sea have acted as a catalyst for significant geopolitical rearrangement. Although not directly involved, BRICS countries have observed their positions being strengthened, while the United States and its allies grapple with the impact of conflict on global trade security and commerce.
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