Red Sea Crisis

Description

Red Sea Crisis

The Red Sea is one of the most important arteries of global trade, accounting for approximately 12% of worldwide maritime commerce. Since the end of 2023, attacks carried out by the Yemeni Houthi movement along this critical maritime corridor have triggered a serious crisis, posing significant threats to global trade and regional geopolitics.

The Houthi Movement

The Houthis, officially known as “Ansar Allah” (“Supporters of God”), are a Zaydi Shia Islamist political and military organization based in Yemen. Representing a segment of Yemen’s Shia minority, the group has been engaged in armed conflict with the central government since 2004. In 2014, they captured the capital, Sana’a, and became one of the main actors in Yemen’s ongoing civil war. Supported by Iran, the Houthis have gained increasing regional influence and are now considered part of the so-called “Axis of Resistance” against the interests of Israel and the United States.

The primary motivation behind the Houthis’ attacks on ships in the Red Sea stems from the Israel-Hamas conflict in the Gaza Strip. The group has declared that it will target all vessels linked to Israel or bound for Israeli ports until Israel halts its military operations in Gaza and allows humanitarian aid to enter. These actions are designed to exert pressure on Israel, demonstrate solidarity with Palestinians, and expand the Houthis’ influence within the region.

The Attacks and Their Scope

Since November 2023, Yemeni Houthis have launched an intensive campaign of attacks on commercial and military vessels in the Red Sea, especially in the area surrounding the Bab al-Mandab Strait. These actions, which escalated in the context of the Israel-Hamas war, aim to pressure Israel and highlight the Houthis’ support for the Palestinian cause. The attacks quickly gained global dimensions, raising serious concerns about international trade and regional security.

Methods of Attack

The methods used by the Houthis in these attacks are diverse and include:

• Drones (Unmanned Aerial Vehicles): This is one of their most frequently used tactics. The Houthis employ Iranian-manufactured or Iranian-designed drones capable of inflicting substantial damage to ships. These drones are relatively inexpensive and readily accessible.

• Anti-ship missiles: The Houthis possess various types of anti-ship missiles, including both cruise and ballistic missiles, which are deployed to damage or sink maritime vessels.

• Small, fast-moving boats: Some attacks have been carried out using armed speedboats that attempt to approach and either board or open fire on ships. This method is particularly effective against slower-moving commercial vessels.

• Naval mines: Although less common than drone and missile attacks, the use of sea mines has been documented, creating navigational hazards in targeted waters.

These attacks are typically launched from Houthi-controlled coastal regions of Yemen, primarily targeting ships transiting the Bab al-Mandab Strait – a narrow and vulnerable chokepoint along the maritime route.

Scale and Impact of the Attacks

Since November 2023, hundreds of incidents have been reported, including direct hits on commercial ships, interception of missiles and drones by coalition forces, and attempted hijackings. Although many of the attacks have been unsuccessful or caused only minor damage, several incidents have provoked serious international alarm:

• MSC United (December 2023): A container ship operated by the Mediterranean Shipping Company (MSC) was struck by missiles, resulting in a fire. While the ship continued its journey, this was one of the first serious, confirmed damages inflicted on a major commercial vessel.

• Galaxy Leader (November 2023): The Houthis hijacked the cargo ship Galaxy Leader, owned by a Japanese company and sailing under a Bahamian flag. The vessel, which had links to Israel, was redirected to the Yemeni port of Hodeidah and remains in captivity along with its crew. This incident marked one of the most visible actions by the movement and demonstrated its capability to seize large ships.

• Rubymar (February 2024): The British cargo ship Rubymar, loaded with fertilizer, sank after being struck by Houthi missiles. This was the first vessel to sink as a result of the crisis, raising serious concerns about a potential environmental catastrophe in the Red Sea.

• Verbena (June 2024): The dry cargo ship Verbena, owned by a Ukrainian company and sailing under the flag of Palau, was heavily damaged by a Houthi attack, forcing the crew to abandon the vessel.

The cumulative effect of these attacks has resulted in a major disruption of global trade. Leading shipping companies, including Maersk, Hapag-Lloyd, MSC, CMA CGM, and Evergreen, have altered their routes to avoid the Red Sea, opting instead to sail around the Cape of Good Hope along the southern coast of Africa. This change has extended shipping times by 7 to 20 days, significantly increasing fuel costs, insurance premiums, and causing serious delays in global supply chains.

International Response

The scale of the Houthi attacks has compelled the international community to take active measures. The United States, together with the United Kingdom and other allies, launched Operation Prosperity Guardian in the Red Sea with the goal of protecting commercial shipping. This operation includes the deployment of naval warships and the interception of Houthi drones and missiles. The U.S. and the U.K. have also carried out retaliatory airstrikes targeting Houthi military installations in Yemen.

Despite these efforts, Houthi attacks have continued, underscoring the complexity of the conflict in the region and its serious impact on the global economy. These incidents have once again highlighted the vulnerability of international trade routes.

Threats to Global Trade

The rerouting of vessels has had serious consequences for global commerce:

• Increased shipping time and costs: The detour around the Cape of Good Hope adds between 7 and 20 days to journeys, significantly increasing fuel expenses and logistical challenges. These costs are ultimately passed on to consumers, affecting the price of goods worldwide.

• Disruptions to supply chains: Longer shipping times lead to delivery delays, which are particularly damaging for perishable goods and industries that rely on Just-in-Time manufacturing systems. This can result in shortages and production delays across multiple sectors.

• Inflationary pressures: Higher transportation costs and disrupted supply chains translate into increased prices for consumer goods, fueling inflationary pressure on the global economy. The risk is especially high for energy commodities like oil and natural gas, as around 8.8 million barrels of oil pass through the Red Sea daily.

• Rising insurance premiums: Due to heightened risks, maritime insurance premiums for ships transiting the Red Sea have risen sharply, further increasing financial strain on shipping companies.

• Shortage of cargo vessels: As vessels are forced to take longer routes, they spend more time at sea and are less available for new shipments, reducing overall shipping capacity and increasing congestion.

Geopolitical Repercussions

The Red Sea crisis, triggered by Houthi attacks on commercial vessels, has become a major threat to global trade. Approximately 12% of the world’s maritime trade flows through this chokepoint, including vast volumes of oil, gas, and consumer goods. The impact of the crisis is already being felt and has the potential to cause even broader economic disruptions.

Key Threats to Global Commerce:

• Rising shipping costs and extended delivery times: One of the most immediate consequences has been the rerouting of vessels. Leading global shipping companies have been forced, for security reasons, to sail around the African continent via the Cape of Good Hope. This detour significantly increases travel time—on average from 7 to 20 additional days. As a result, fuel costs rise sharply, driving up freight rates. These additional expenses are passed on to consumers, ultimately increasing the prices of goods.

• Supply chain delays: Longer voyages lead to delivery disruptions and logistical bottlenecks. This is particularly problematic for industries that depend on Just-in-Time manufacturing models. Delays in the delivery of raw materials or components can cause factory shutdowns and reduced production, resulting in product shortages or delays for end users.

• Inflationary pressure: Increased transport costs and supply disruptions generate inflationary pressures. As shipping becomes more expensive, the final cost of products also rises. This especially affects energy commodities such as oil and gas, much of which transits the Red Sea. Rising prices can weaken consumer purchasing power and slow global economic growth.

• Higher insurance premiums: With greater security risks, maritime insurance companies have significantly raised premiums for vessels operating in the Red Sea. These additional costs further strain the finances of shipping firms and contribute to rising overall freight expenses.

• Reduced shipping capacity: Since vessels now spend more time in transit due to longer routes, fewer ships are available for new cargo. This leads to reduced shipping availability and more congestion, which may further drive up freight prices and delays.

• Erosion of confidence and reduced investment: The uncertainty and elevated risks in the Red Sea are undermining confidence in the stability of global trade. This may lead to reduced investment in maritime transport and force companies to reassess their supply chain strategies. While this could promote long-term diversification, in the short term it presents serious challenges to adaptation.

The Red Sea crisis clearly demonstrates how vulnerable global trade is to geopolitical and regional conflicts. Effective management of such threats requires international cooperation and sustained diplomatic efforts to ensure global economic stability. As the situation evolves, the need for secure maritime routes and diversified supply chains becomes ever more urgent—not just for commercial resilience, but for geopolitical balance as well.

Long-Term Consequences and Future Outlook

The Red Sea crisis has exposed the vulnerability of the global economy and the fragility of international supply chains. In the long term, the crisis may lead to a reconfiguration of supply chains to reduce dependency on critical maritime chokepoints. Companies may begin to invest in more diversified transportation routes, including overland and rail alternatives, though such transitions are often lengthy and costly.

Additionally, the crisis underscores the urgent need for enhanced international cooperation to ensure maritime security. Stronger global mechanisms and more coordinated efforts are necessary to prevent such attacks and to safeguard the uninterrupted flow of international trade.

In conclusion, the Red Sea crisis—driven in large part by Houthi actions—is not merely a localized conflict, but a reflection of broader regional and global dynamics. It threatens the global economy, contributes to inflationary pressures, and increases the risk of escalation in an already fragile region. Resolving this crisis will require a comprehensive approach, involving both military and diplomatic measures, to stabilize the situation and ensure the safety of global maritime commerce.