By Dmitry Zhdannikov and Ahmed Elimam
DAVOS/DUBAI (Reuters) -Disruptions to Red Sea (NYSE:SE) shipping caused by Houthi attacks will push up prices of consumer goods, an executive from port and freight operator DP World said on Tuesday as a missile struck another vessel in the region.
The Iran-allied Houthi militia has threatened to expand its attacks to include U.S. ships in response to American and British strikes on its sites in Yemen.
Attacks by the Houthis on ships in the region since November have impacted companies and alarmed major powers - an escalation of Israel's more than three-month-old war with Palestinian Hamas militants in Gaza. The Houthis say they are acting in solidarity with Palestinians.
DP World CFO Yuvraj Narayan said he expected that disruptions would hit European consumers hardest.
"The cost of goods into Europe from Asia will be significantly higher," Narayan told Reuters at the annual World Economic Forum meeting in Davos, Switzerland.
"European consumers will feel the pain ... It will hit developed economies more than it will hit developing economies," the Dubai-based logisGreek tics company's finance chief added.
War risk insurance premiums for shipments through the Red Sea are rising, insurance sources said on Tuesday.
A Malta-flagged, Greek-owned bulk carrier was targeted and hit by a missile while northbound in the Red Sea 76 nautical miles northwest of the Yemeni port of Saleef, a security firm and two Greek shipping ministry sources said on Tuesday.
The vessel, the Zografia, was sailing from Vietnam to Israel with 24 crew on board and was empty of cargo when attacked, one of the Greek sources said. "There were no injuries, only material damage," the source added. It was still sailing but would probably reroute for safety checks.
Underlining concerns, Japanese shipping operator Nippon Yusen, also known as NYK Line, instructed its vessels navigating near the Red Sea to wait in safe waters and is considering route changes, a company spokesperson said.
Ocean Network Express, a joint venture between Japan's Kawasaki Kisen Kaisha, Mitsui O.S.K. Lines and Nippon Yusen, said last month it would reroute vessels or temporarily pause journeys and move to safe areas.
However, shipping giant Maersk sent two container ships through the Red Sea carrying goods for the U.S. military and government.
Container vessels have been pausing or diverting from the Red Sea that leads to the Suez Canal, the fastest freight route from Asia to Europe. Many ships have been forced to circumnavigate South Africa's Cape of Good Hope instead.
GAZA CEASEFIRE CALL
The U.S.-led coalition meant to safeguard commercial traffic in the Red Sea is weak because regional powerhouses Saudi Arabia, the United Arab Emirates and Egypt have not taken part, Yemen's vice president said on Tuesday.
"This Bab al-Mandab corridor is of interest to the whole world and to the region, so regional intervention is key," Aidarous al-Zubaidi told Reuters in an interview, referring to the narrow strait at the southern entrance to the Red Sea.
Zubaidi's separatist Southern Transitional Council is part of an alliance that opposes the Houthis in Yemen.
Saudi Arabia's foreign minister said Houthi attacks on commercial ships were connected to the war in Gaza. Prince Faisal bin Farhan Al Saud said the kingdom's priority is finding a path to de-escalation through a ceasefire in Gaza.
Also speaking in Davos, Chinese Premier Li Qiang said it was important to keep global supply chains "stable and smooth".
About 12% of world shipping traffic transits the Suez Canal via the Red Sea.
Vessels supplying liquefied natural gas (LNG) from Qatar are among the many ships being forced to sail around Africa via the Cape of Good Hope. That diversion can add about nine days to the normally 18-day trip from Qatar to northwest Europe.