JSF issues report on impact of unrest in Bab el Mandeb Strait on trade

AMMAN — The Jordan Strategy Forum (JSF) on Sunday launched a report titled, “The Impact of Disruptions in the Bab el Mandeb Strait on Jordanian Trade”, with the aim of analysing the current state of Jordanian trade and assessing the potential consequences of a closure or prolonged disruption of the strait, given the local and global importance of this maritime route.

The Bab Al Mandeb Strait accounts for 30 per cent of the world›s container trade, out of which 10 per cent of the world›s seaborne fuel passing through this passageway, according to a report in The Economist, cited by the Jordan News Agency, Petra.

For Jordan›s foreign trade, the report showed that approximately 28 per cent of Jordan›s total trade passed through the strait during the period 2020-2022. In terms of Jordan›s imports through the strait, they accounted for 30 per cent of the country’s total imports, reaching around $22 billion annually during the same period. 

According to the report, Jordan›s top trade partners include China, India, South Korea, Taiwan, Japan, Indonesia, Malaysia, Vietnam, Singapore, Bangladesh, Thailand and other countries in South Africa, Australia and New Zealand, with an annual import value  of JD6.6 billion. 

The main goods imported through the strait include machinery, vehicles, textiles, clothing, several food products, plastics, wood and metals, the report said, noting that about 19 per cent of Jordan›s total imports come from China and India, mainly through the Bab Al Mandeb Strait.

The report said that a potential closure of the strait could have a significant impact on the Jordanian market by increasing production costs due to potential disruptions and increased shipping and transport costs.  

The report also highlighted that Jordan›s exports through the strait, the average annual value from 2020 to 2022, exceeds $2.1 billion, representing 21.4 per cent of Jordan›s total exports to the world.

India, Indonesia, China, Bangladesh, Malaysia, Australia and Japan are among the most important destinations for Jordanian exports through the strait, with exports to India accounting for 16.6 per cent of Jordan›s total global exports.

Chemical and mining industries such as fertilisers, salts and inorganic compounds dominate the products exported through the strait, accounting for a high 92 per cent of Jordan›s total exports through this route.

The report also highlighted the potential tangible negative impact on Jordan’s imports and exports, affecting various economic indicators, if the Bab Al Mandeb Strait were to be closed.

The JSF also underlined the urgent need to end the aggression in Gaza and restore regional stability to boost resilience and economic growth.