A prolonged disruption to shipping in the Red Sea could keep upward pressure on inflation and freight rates according to Rick Marriner, chief executive of Indian refiner Reliance Industries' US business.
"If this is going to be a drawn out, sustained conflict … then this inflation, this pressure you feel is going to be here for a little bit," Marriner said today at the Argus Americas Crude Summit in Houston, Texas.
Ongoing attacks on ships in the Red Sea and Gulf of Aden have disrupted trade in the region and further afield, rerouting freight around the Cape of Good Hope and putting upwards pressure on crude prices.
"The real impact of all this is inflation," Marriner said. "Every ship now has this chain of emails and discussions about how and where and what do we do with it."
But recent logistical issues for shippers began with the Panama Canal, not the Red Sea, Marriner added. Low water levels in the canal have limited passage, leading to congestion and higher freight rates since early last year.
