The Red Sea Shipping Disruptions And Its Significant Impact (Image: Pixabay)
As the attacks by Yemen”s Houthi militants on ships are surging in the Red Sea, multiple shipping companies ordered their ships to hold in place and not enter the Bab el-Mandeb Strait. On December 18, Taiwanese container shipping line Evergreen decided to temporarily stop accepting Israeli cargo with immediate effect. The company also instructed its container ships to suspend navigation through the Red Sea. While the attacks in the Red Sea are disrupting maritime trade, the cost of shipping goods to Israel by sea has also witnessed a rise recently.
Apart from Evergreen, oil giant BP also announced that it is halting all shipments of oil and gas through the Red Sea. The Guardian reported that British oil major paused shipping in the region indefinitely, citing a “deteriorating security situation.” Notably, global oil prices jumped on Monday, followed by BP”s decision to halt shipping. Several companies have taken measures to secure their vessels after attacks by Houthi rebels in the Red Sea.
Iran-backed Houthi militants in Yemen are attacking ships in the Red Sea region to show support for Hamas following Israel”s military offensive in Gaza. Houthi militants are mainly targeting vessels traveling through the Bab al-Mandab Strait, a crucial trade chokepoint between the Persian Gulf and Europe. Bab al-Mandab Strait is a busy sea lane through which much of the world”s oil is shipped. It is worth mentioning that 10 percent of the world’s trade passes through the Red Sea. Earlier, the Houthi movement had clearly stated that they would target all vessels heading to Israel, regardless of their nationality. On December 9, a Houthi military spokesperson said that all vessels sailing to Israeli ports are banned from the Arabian Sea and the Red Sea.
The disruption to Red Sea shipping is expected to affect the global economy. The Red Sea, which is one of the world”s major routes for oil and fuel shipments, is also highly important for consumer goods” transport. Due to the attacks, several vessels started sailing around Africa. This has resulted in a rise in shipping costs as well as a delay in shipping.
At the same time, Houthi attacks are a direct threat to Israel’s maritime trade. The country mainly depends on its maritime trade for imports and exports. Ashdod in the south and Haifa in the north are the biggest ports in Israel. Israeli container line Zim told Reuters that it had “witnessed an increase in the level of the threat.” The situation has also prompted higher surcharges on its ships, which include rates to Israeli ports from Asia.
An expert in logistics from the region told Timeline that the Houtis have realised the worth of their power in a geopolitical zone where they can be natural negotiator and have also succeeded in attracting world attention to Yemen. With the engagement they are doing, Houtis may be expecting external world support to solve their political problems and develop their region into a new world. Like the Suez Canal controlled by Egypt, there are opportunities for Houthis in the region if they manage their avenues properly to generate economic sustainability. The expert also said that, in the long run, the emergence of Houthis as a force may affect Israel’s Bengurean Canal project as well.
Earlier, on December 10, Israeli publication N12News reported that Israeli Prime Minister Benjamin Netanyahu has allegedly told US President Joe Biden that Israel will act militarily against Yemen”s Houthi movement if the US fails to do so. Israel has earlier stated that the attacks on ships are an “Iranian act of terrorism.”
Meanwhile, US Defense Secretary Lloyd Austin announced the creation of a coalition to safeguard commerce in the Red Sea. This significant coalition, including the UK, Canada, France, Italy, the Netherlands, Norway, and Spain, is to patrol the Red Sea in response to rising Houthi attacks. “Today I am announcing the establishment of Operation Prosperity Guardian, an important new multinational security initiative,” said Lloyd Austin in the official statement released on December 18. The main objective of Operation Prosperity Guardian, which focuses on security in the Red Sea, is to ensure the freedom of navigation for all countries.
