The Ripple Effects of Red Sea Trade Disruptions: Energy Prices, Supply Chains, and Economic Growth in Emerging Markets

Abstract

The Red Sea represented one of the most important maritime trade corridors connecting global markets and facilitating the transportation of energy resources and commercial goods. Recent geopolitical tensions and security challenges disrupted shipping operations in the region and raised concerns about their economic consequences for emerging markets. This study examined the effects of Red Sea trade disruptions on energy prices, supply chain performance, and economic growth. A quantitative research design was employed, and data were collected from a sample of 300 professionals working in international trade, logistics, supply chain management, and energy-related sectors. Statistical analysis was conducted using descriptive statistics, correlation analysis, and multiple regression techniques. The findings revealed that Red Sea trade disruptions significantly increased energy prices and negatively affected economic growth. Correlation results indicated strong relationships between Red Sea trade disruptions and energy prices (r = .782, p < 0.01) and between supply chain performance and economic growth (r = .758, p < 0.01). Regression analysis demonstrated that Red Sea trade disruptions exerted a significant negative effect on economic growth (β = -0.341, p < 0.001), while energy prices also negatively influenced economic performance (β = -0.287, p < 0.001). Supply chain performance emerged as the strongest positive predictor of economic growth (β = 0.428, p < 0.001). The regression model explained 71.6% of the variation in economic growth (R² = 0.716). The study concluded that maritime trade disruptions posed substantial economic challenges by increasing energy costs and weakening supply chain efficiency. Strengthening energy security, supply chain resilience, and trade route diversification remained critical for supporting sustainable economic growth in emerging markets.