Red Sea Risks: Houthi Strikes Impact Global Shipping Costs

A coalition of 10 countries, with the United States at the helm, will struggle to prevent Yemen’s Houthi rebels from targeting ships in the Red Sea. That is not to say that both parties don’t have a shared interest in avoiding an escalation that could potentially spiral out of control. The Houthis claim their assaults on ships linked to Israel, be they commercial or military, are to exert pressure on Israel to cease the Gaza conflict.

Also, the attacks enjoy support within Yemen, bolstering the Houthi rebels’ recruitment drive for new fighters. Gregory Brew, an analyst at the Eurasia Group, says Houthi actions will not cease until Israel’s Gaza campaign ends. Then, too, it may persist. Since October 7, over 20,000 Palestinians have been killed in Gaza from Israeli bombings and artillery shelling.

The Houthis seized cargo ship ‘Galaxy Leader’, linked to Israel, on November 19. They shared a video showcasing the capture. Now, it has become a tourist attraction for Yemenis. The group then targeted several ships navigating through the Bab el-Mandeb Strait, a narrow path that leads to the Red Sea and onward to the Suez Canal.

About 30 percent of global container ship traffic relies on the Red Sea and the Suez Canal. Sanam Vakil, deputy head of the Middle East North Africa programme at Chatham House, says the Houthi presence in northern Yemen places them in a crucial geopolitical bottleneck and that the international community should take this into account.

While Houthi attacks haven’t resulted in injuries or deaths, the impact on global shipping is telling. Over 12 shipping firms, including Mediterranean Shipping Company, CMA CGM of France, and AP of Denmark, have suspended shipping through the Red Sea. Roughly 12 percent of the world’s seaborne oil and eight percent of liquefied natural gas traverse through the Bab el-Mandebt, mainly bound for Europe. The attacks also impact commodities such as grain, palm oil, and manufactured goods. Several companies are opting to sail around the southern tip of Africa, adding nearly nine days to the voyage and increasing costs by at least 15 percent.

Meanwhile, the United States has applied sanctions on 13 individuals accused of financing the Houthis. A maritime coalition with 10 nations, including the United Kingdom, France, Italy, Canada, the Netherlands, Norway, Spain, Seychelles, and Bahrain, has been formed to discourage the Houthis. Yemen’s internationally recognized government, based out of Aden after a nine-year war with the Houthis, has criticized the Red Sea attacks. But it faces a dilemma as it doesn’t want to be seen as supporting Israel.

Iran, which supports the Houthi rebels, has been cautious not to escalate the Gaza conflict to the wider region. The reality is there are constraints to Iran’s influence on the Houthis. Eleonora Ardemagni of the Italian Institute for International Political Studies (ISPI) isn’t convinced Iran has too much influence on the Houthis. The Houthi also pursue an independent agenda. Before October 7, the Houthi faced internal challenges but their backing for Gaza has gained them widespread support. Vakil says the Houthi have longstanding ideological issues with Israel. The Houthi want to make a global impact with strength and strategic positioning.

The Houthi state media has reported over 1,000 protests, boycotts, and recruitment efforts since the war on Gaza began. Despite war-weariness from a decade of civil war in Yemen, backing Hamas has helped the Houthi to recruit new fighters who join to fight in Gaza but are deployed against the Yemeni government stronghold of Marib.

Chances are the Red Sea attacks could be a diplomatic tactic targeting Saudi Arabia. The Houthi and Saudi Arabia have been in talks for a ceasefire, following a UN-mediated truce in 2022. Saudi Arabia backs Yemen’s internationally recognized government. Tensions in the Red Sea and disruptions to oil trade would negatively impact Saudi Arabia. The attacks on shipping vessels in the Red Sea puts pressure on Saudi Arabia to return to the table.

That said, the effects of the attacks on global shipping in Bab el-Mandeb and the Red Sea have brought in the United States and its allies but this hasn’t had much of an effect on Houthi belligerence. Houthi spokesperson Mohamed Abdulsalam said the Red Sea “operations” were in support of Gaza. On November 26, the Houthis launched two ballistic missiles that landed close to a US warship. The US is reluctant to escalate the crisis. It has refrained from retaliatory action against the Houthi. The Houthi, too, don’t want to cross a certain dangerous threshold. (IPA Service)