In the current international situation, Yemen's Houthi warning to the U.S. and U.K. has attracted widespread global attention. The Houthis have threatened that they will not hesitate to cut the Red Sea undersea fiber optic cable if the US and UK launch another attack on Yemeni airports.
The Red Sea undersea optical cable, the lifeblood of communication pathways, connects Europe, Africa, and the Middle East.
Such a threat not only poses a threat to geopolitical stability but could also have a serious impact on global financial markets.
Red Sea submarine cables, like any other fiber optic cables, are communication cables made of glass fibers with a plastic outer layer that is usually buried under the sea and are used for communication and data transmission around the globe.
These submarine cables usually consist of multiple fibers, each capable of withstanding high-speed data transmission.
The structural design of submarine fiber optic cables is very complex to ensure long-term stable operation in the submarine environment.
Submarine fiber optic cables carry the data transmission of global financial transactions and are one of the indispensable infrastructures of the modern financial industry.
More than 99% of the world's international Internet traffic and more than 80% of international telephone communication traffic passes through submarine fiber optic cables. In the financial sector, submarine fiber optic cables support real-time data transmission between major financial centers worldwide, ensuring fast, secure, and reliable financial transactions.
As of May 2023, the total length of submarine cables worldwide has exceeded 1.5 million kilometers, connecting all continents and important financial cities.
As one of the main conduits for financial transactions, submarine cables play an important role in enabling high-frequency and large-value transactions as well as the transmission of financial information.
They support the operation of global stock, foreign exchange, bond, and commodity markets, and are directly related to the interests of investors, enterprises, and financial institutions.
The severance of submarine cables will have a wide-ranging impact on global financial markets. Some developed countries dominate the world's largest financial centers, with numerous financial institutions and market participants.
The severance of submarine cables will result in several impacts. Like a pipe with a valve off.
The severance of underwater fiber cables will result in disruptions and delays in financial transactions, creating instability in financial markets. As financial transactions require real-time data and fast execution, any delays could trigger inaccuracies and a drop in liquidity.
The severance of submarine fiber optic cables could exacerbate cybersecurity risks. Financial exchanges rely on high-speed, reliable data transmission, and any interruption or tampering with data could result in losses for financial institutions and investors, as well as a knock-on effect on confidence in the financial markets.
Submarine fiber optic cables are capable of withstanding certain destructive forces and are often guarded to protect them from undersea activity, fishing trawls, natural disasters, and other unforeseen events.
Submarine cables are not easy to cut. Submarine cables are typically laid on the ocean floor and buried thousands of meters below the seabed. Their construction and maintenance require significant financial and technical support, as well as dealing with the challenges of the marine environment, such as undersea earthquakes, tsunamis, and damage from marine life. The severance of underwater fiber optic cables is a relatively rare event.
The probability of severing a submarine fiber optic cable is low, but there are still some potential risk factors.
Submarine fiber optic cables may experience human factors during laying and maintenance, such as accidental damage or vandalism. In addition, submarine cables can be affected by natural disasters and geological activity, although these are relatively rare.
However, if someone intentionally damages a submarine fiber optic network, this may entail considerable costs.
ZMS Cables believes that, first and foremost, submarine fiber optic cables are a key facility for global communications, and that their existence reflects the interconnectedness of the planet, as well as being a lifeline for financial transactions and the dissemination of information.
If this lifeline is cut, financial transactions will be blocked and information transmission will be interrupted. People may lose contact as a result, and business activities will be hampered as a result.
The inability to carry out a large number of financial transactions and commercial communications could trigger panic in the capital market, increase market uncertainty, and possibly trigger a financial crisis.
Second, the threat capability held by the Houthis in Yemen is real, and they have proven themselves capable of launching attacks that pose a direct threat to global communications facilities.
This reinforces global concerns about the conflict in the Middle East. In this context, the continued looming situation in Yemen will further increase global tensions
There are more regions throughout the world where instability and disputes are highlighted, especially in the Middle East, where frequent conflicts and wars make the global situation full of variables.
And this time, the Houthis in Yemen have issued a threat that undoubtedly increases the pressure and risk of the global political and economic system.
To summarize, the Houthi threat may not only lead to a geopolitical crisis but also pose a threat to the global financial market.
The world must pay great attention to it and respond to it actively. On the other hand, it also demonstrates once again the importance of global interconnections and the potential risks posed by the disruption of interconnection facilities.
This is an issue that requires a high degree of vigilance on the part of all countries around the globe, and indeed on the part of the international community as a whole.
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