According to predictions by market experts, the recent Red Sea trade attack by Yemeni rebels has resulted in multiple assaults on commercial vessels, sparking concerns about the safety of maritime traffic in the region. The Yemeni Houthis have mainly targeted oil tankers and cargo ships, with at least one vessel carrying Wheat being affected. This disturbance in Red Sea trade is expected to have a substantial impact on global Wheat supplies. Any delays or diversions in Wheat shipments could lead to increased prices and potential shortages in importing nations, particularly in Africa and the Middle East, which heavily rely on Wheat imports.

The attacks in the Red Sea are part of the ongoing conflict in Yemen, which has been persistent for several years and has already caused a humanitarian crisis in the country. The disruption of trade could further worsen the situation impacting the entire globez. Recently, four of the world's five largest shipping firms are expected to change their routes due to these attacks, putting both oil and seaborne Wheat shipments at risk.

Global seaborne Wheat trade witnessed a surge in the second half of November due to increased demand from West Asia. The region received approximately 0.8 million tons of Wheat between mid- and end-November 2023, with recipients including Turkey, Saudi Arabia, Syria, Yemen, and Jordan. Security concerns also impeded Ukraine's Wheat shipments by around 0.9 million tons from reaching the Mediterranean region, with destinations for the foiled shipments including Israel, Egypt, Tunisia, Italy, Spain, and one long-range shipment bound for China.

The decision to reroute shipping due to the Red Sea attacks jeopardizes both oil and seaborne Wheat shipments. Rerouting tankers around the Cape of Good Hope adds significant distance and time to journeys, increasing transportation costs and potentially impacting global oil prices. The uncertainty surrounding the security situation in the Red Sea may dissuade some companies from shipping oil through the region, leading to supply disruptions.

Similarly, rerouting Wheat ships increases journey times and costs, potentially straining food supply chains and impacting Wheat prices in import-dependent countries. Delays in Wheat shipments could worsen existing food insecurity issues, especially in regions heavily reliant on imports from major Wheat producers like Ukraine and Russia. Countries such as Egypt, Ethiopia, and Somalia depend on Wheat imports, often sourced from Ukraine and Russia via the Red Sea. Any disruption could result in significant shortages and price hikes, pushing vulnerable populations further into hunger. Additionally, this could contribute to higher freight costs and fuel charges across the global market, further disrupting the overall supply chain momentum.