When the horrific conflict between Israel and Hamas in Gaza erupted last October, most analysts predicted that its global economic impact would not be significant. That is no longer true. The danger of its fallout – specifically attacks by Yemen-based Houthi militants on commercial ships in the Red Sea – setting off a wider conflict with dire global ripple effects escalated sharply last week.

On Jan 12, a US-led coalition launched a barrage of military strikes on nearly 30 sites in Yemen. A smaller strike followed the next day. Both came after the Houthis ignored repeated warnings from the US and other governments to stop their attacks on shipping in the area.