German Vice-Chancellor Robert Habeck said he does not expect major supply chain problems for the German economy.

This was due to the escalating conflict with Yemen’s Houthi militants in the Red Sea.

There are delays in the supply chain because the ships are now travelling the long way around.

But Europeans can adjust to the change, said Habeck as of Tuesday while attending the World Economic Forum in Davos.

The Iranian-backed Houthis have repeatedly attacked ships allegedly linked to Israel in retaliation for Israel’s ongoing military offensive in the Gaza Strip.

Ships heading for Europe via the Suez Canal from Asia or the Gulf must pass through the Red Sea.

Major shipping companies have responded by sending ships bound for Europe around the southern tip of Africa instead of a longer route.

“Everyone tells me that things will settle down again,” Mr Habeck said. 

He also said transport costs do not play a big role and that there will be massive problems.

The United States and the United Kingdom have recently responded to the attacks by Houthi militants with military strikes on targets in Yemen.

The Red Sea route accounts for roughly 10 per cent of global trade. 

(dpa/NAN)