Bab al-Mandeb crisis tests Lebanon’s supply chains

The recent expansion of the Iran-backed Houthi movement along Yemen’s western coastline has heightened concerns over the security of one of the world’s most strategically significant maritime chokepoints. After capturing Mokha, the group expanded southward into the Dhubab district, reaching areas directly overlooking the Bab al-Mandeb Strait, while also taking control of Mayyun (Perim) Island, the Hanish Islands, and Zuqar Island.

The developments have renewed fears over the security of international shipping routes linking the Red Sea to the Gulf of Aden and the Indian Ocean. For Lebanon, while the direct impact differs depending on the origin and destination of goods, prolonged disruption could influence import costs, shipping times, supply chains, and global energy markets.

In an interview with The Beiruter, Lebanese economic analyst Professor Jassem Ajaka explained how continued instability around Bab al-Mandeb could affect Lebanon’s economy, trade, and logistics.

Limited direct impact on many Lebanese imports

According to Professor Ajaka, the consequences for Lebanon depend largely on the geographical origin of imported goods.

He explained that imports arriving from South Asia and East Asia, including electronics, industrial inputs, and raw materials, would face the greatest disruption if navigation through Bab al-Mandeb remains restricted. Shipping companies would be forced to reroute vessels around the Cape of Good Hope, extending voyages by approximately 10 to 14 days.

Longer voyages would also translate into significantly higher transportation costs. Shipping companies would pass additional fuel expenses to importers through Bunker Adjustment Factors, while vessels operating near the southern Red Sea would likely incur higher war-risk insurance premiums, further increasing import costs.

By contrast, Ajaka noted that most Lebanese imports sourced directly from Europe, Türkiye, and North Africa do not rely on the Bab al-Mandeb route. As a result, these goods would remain largely unaffected by disruptions in the southern Red Sea.

Exports face uneven challenges

The impact on Lebanese exports would also vary according to destination.

Ajaka explained that the majority of Lebanon’s agricultural and industrial exports destined for the Gulf Cooperation Council (GCC) countries, Jordan, and Iraq primarily depend on overland transport through Syria or roll-on/roll-off maritime routes across the Mediterranean and northern Red Sea, which avoid Bab al-Mandeb altogether.

However, exports bound for East Africa, South Asia, and the Far East would experience more significant disruptions. Longer shipping times, increased freight surcharges, and higher insurance costs would raise export expenses, while extended transit periods could also threaten the integrity of refrigerated supply chains for perishable agricultural products.

For exporters operating on tight delivery schedules, these delays could reduce competitiveness in overseas markets.

Longer shipping times could pressure businesses

Ajaka stressed that one of the less visible consequences of prolonged maritime disruption concerns the financing cycle of Lebanese importers.

Since many imports are prepaid in cash before shipment, longer transit periods mean traders must wait significantly longer before receiving and selling their goods. Instead of the usual shipment cycle of around 25 days, deliveries could take more than 40 days.

This would tie up working capital for extended periods, reducing traders’ ability to replenish inventory quickly and limiting business liquidity, particularly for small and medium-sized enterprises.

Potential pressure on consumer prices

While shipping disruptions are likely to increase transportation costs, Ajaka believed the impact on retail prices will vary considerably across products.

He explained that low-value, bulky goods imported from Asia, such as rice and pulses, are the most vulnerable to price increases because freight costs represent a larger share of their overall landed value.

However, whether consumers ultimately experience substantial price increases depends on several domestic factors, including local distribution costs, exchange-rate conditions, and commercial markups, rather than shipping expenses alone.

This means international freight disruptions do not automatically translate into proportional increases in retail prices.

Energy markets remain an indirect risk

Although Lebanon imports refined petroleum products mainly from Mediterranean refineries, making its fuel supply less directly dependent on Bab al-Mandeb, Ajaka warned that the country remains exposed to developments in global energy markets.

Any prolonged disruption affecting international oil transportation can contribute to higher global crude prices and increased tanker charter rates, both of which may eventually influence domestic fuel prices. Consequently,

The impact on Lebanon’s energy sector is more likely to come through international market volatility than through physical supply shortages.

Practical measures to reduce the impact

Ajaka outlined several measures that could help Lebanon mitigate the economic effects of prolonged instability around Bab al-Mandeb.

For importers relying on Asian suppliers, he suggested considering greater diversification toward European and Mediterranean products where commercially feasible. Shorter shipping routes would reduce delivery times while eliminating risks associated with Red Sea navigation.

He also recommended expanding local warehousing capacity for non-perishable imported goods. Maintaining larger inventories would provide businesses with greater flexibility to absorb temporary disruptions without interrupting supply.

On the export side, Ajaka highlighted the importance of maintaining efficient trucking corridors through Syria toward Jordan and the Gulf while accounting for administrative border procedures.

Domestically, he argued that streamlining customs procedures and accelerating container clearance at the ports of Beirut and Tripoli would reduce costly delays, improve supply-chain efficiency, and ease logistical bottlenecks without compromising government customs revenues.

Hence, the Houthi expansion toward Bab al-Mandeb has implications that extend far beyond Yemen, affecting one of the world’s most critical maritime corridors. While Lebanon is unlikely to experience uniform economic consequences, sectors dependent on Asian trade, longer shipping routes, and global energy markets remain exposed to rising costs and logistical disruptions.