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Apr - 13 - 2026 Download The Version
Since late February 2026, the Middle East has witnessed an unprecedented military escalation between the United States and Israel on one side, and Iran on the other. This has cast a shadow over the global economy through rising energy prices, disrupted supply chains, and higher financing costs, with varying impacts among countries depending on their economic capacities. Fragile states, including Yemen, are among the most affected due to their heavy reliance on imports and foreign aid. This escalation comes at a time when Yemen’s economy is already suffering from deep structural imbalances caused by a prolonged war lasting more than a decade. These include declining revenues, halted oil and gas exports, shortages of foreign currency, monetary division, and heavy dependence on remittances and aid. By the end of 2025, the economy was already on the verge of collapse, with rising food costs and exchange rate instability. Initial indicators show that Yemen was quickly affected by the consequences of the war through rising fuel prices, maritime shipping costs, insurance premiums, and increased import expenses. Container shipping costs doubled, and additional war-risk charges were imposed. Shipping routes also shifted to more complex and expensive models, increasing pressure on the domestic economy. Shipping costs to Yemen rose sharply as the war escalated, with container transport costs increasing by around $3,000 to $5,000 in some cases. The cost of shipping a 20-foot container from China to Aden doubled from around $2,500 before the war to between $5,000 and $6,000 afterward, with additional war-risk fees ranging from $2,000 to $3,000 per container. Changes in shipping routes further increased costs, with extra charges in some multi-stage shipping models reaching between $5,000 and $8,500 per container bound for Aden, and between $5,500 and $9,500 for Mukalla, in addition to storage and transit fees. The paper concludes that continued escalation will worsen Yemen’s economic and humanitarian conditions through rising prices, pressure on the currency, and growing risks of stagflation, requiring urgent interventions to mitigate the severity of these shocks.
Since late February 2026, the Middle East has witnessed an unprecedented military escalation between the United States and Israel on one side, and Iran on the other. This has cast a shadow over the global economy through rising energy prices, disrupted supply chains, and higher financing costs, with varying impacts among countries depending on their economic capacities. Fragile states, including Yemen, are among the most affected due to their heavy reliance on imports and foreign aid.
This escalation comes at a time when Yemen’s economy is already suffering from deep structural imbalances caused by a prolonged war lasting more than a decade. These include declining revenues, halted oil and gas exports, shortages of foreign currency, monetary division, and heavy dependence on remittances and aid. By the end of 2025, the economy was already on the verge of collapse, with rising food costs and exchange rate instability.
Initial indicators show that Yemen was quickly affected by the consequences of the war through rising fuel prices, maritime shipping costs, insurance premiums, and increased import expenses. Container shipping costs doubled, and additional war-risk charges were imposed. Shipping routes also shifted to more complex and expensive models, increasing pressure on the domestic economy.
Shipping costs to Yemen rose sharply as the war escalated, with container transport costs increasing by around $3,000 to $5,000 in some cases. The cost of shipping a 20-foot container from China to Aden doubled from around $2,500 before the war to between $5,000 and $6,000 afterward, with additional war-risk fees ranging from $2,000 to $3,000 per container.
Changes in shipping routes further increased costs, with extra charges in some multi-stage shipping models reaching between $5,000 and $8,500 per container bound for Aden, and between $5,500 and $9,500 for Mukalla, in addition to storage and transit fees.
The paper concludes that continued escalation will worsen Yemen’s economic and humanitarian conditions through rising prices, pressure on the currency, and growing risks of stagflation, requiring urgent interventions to mitigate the severity of these shocks.