The Biden administration announced this week the formation of a US-led naval coalition to protect international shipping in the Red Sea amid a surge of attacks on commercial vessels by Iran-backed Houthi rebels in Yemen.
Background of the conflict
The Houthis have been fighting a civil war against the internationally recognized government in Yemen since 2014. Experts say Iran provides money, weapons and training to the Houthi insurgency, allowing them to conduct sophisticated assaults.
The Houthis have recently focused attacks on shipping lanes in the southern Red Sea and Bab al-Mandab strait, a critical chokepoint for global trade connecting the Mediterranean Sea and the Indian Ocean.
Economic impact
The Red Sea corridor is one of the world’s busiest shipping routes, used to transport goods from Asia to Europe. Around one tenth of global trade passes through the narrow Bab al-Mandab strait each year.
Experts warn the attacks could severely disrupt the supply chain, raising shipping insurance premiums and freight rates. Several vessels have already been damaged and some temporarily forced to turn back.
Greg Miller, an analyst at FreightWaves, said shipping companies are considering costly alternatives like air freight to avoid the danger zone.
“Rates are already high. Now they’re going even higher,” he said.
| Route | Shipping cost per container | Increase since attacks began |
|---|---|---|
| Shanghai to Rotterdam | $10,000 | +267% |
| Shanghai to New York | $11,500 | +156% |
Re-routing ships around the Cape of Good Hope would add 15 days to transit times from Asia to Europe. Analysts say oil prices could also rise due to uncertainty in the region.
International response
The US 5th Fleet said its new Operation Prosperity Guardian naval coalition will patrol the Red Sea and respond to threats in coordination with regional allies.
So far over 20 nations have joined, including Saudi Arabia, UAE, Egypt, Jordan and Israel. However some key US allies like France, Italy and Spain declined participation due to unilateral American command of the mission.
Meanwhile the UK, Germany, Greece, Netherlands, Canada and South Korea provided verbal support but no naval assets. Analysts say this reflects allied discomfort with direct confrontation against Iranian proxies.
The coalition includes early warning systems to detect incoming Houthi attacks and protect merchant ships in the Red Sea. The US and allies claim a legal basis to defend freedom of navigation in international waters.
Latest attacks
The Houthis have launched over 150 attacks on commercial shipping in 2022. The pace escalated recently as negotiations stalled to extend a UN-brokered truce that expired in October.
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On Dec 20, the Houthis fired a bomb-laden drone at a tanker off Yemen’s coast, which was intercepted by Saudi air defenses. Two crew members suffered minor injuries.
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On Dec 19, A Houthi sea mine exploded against a tanker contracted by a Saudi Aramco refinery, causing slight damage.
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On Dec 14, a Houthi drone attack sparked an explosion on a fuel tanker 40 miles off the Yemeni port of Mukalla.
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On Dec 11, a crude oil tanker contracted by US energy firm ExxonMobil came under Houthi missile fire. Saudi defenses shot the missile down but shell fragments caused damage.
Iran’s role
US officials this week released intelligence showing Iran has expanded support to the Houthis. They say Iran provides drones, missiles technology and coordinates targeting data to allow pinpoint attacks on shipping.
A top IRGC general reportedly manages training for Houthi naval forces from an Iranian spy ship anchored off Yemen’s coast.
Analysts say the Red Sea campaign allows Iran to disrupt world trade and energy supplies without overt aggression that could provoke international retaliation. The Houthis gain bargaining leverage to press territorial demands in peace talks.
Tehran denies direct involvement in the assaults, while criticizing the naval coalition as Western imperialism. However evidence indicates Iran seeks to bog down rivals like Saudi Arabia next door and exploit turmoil to expand regional influence.
Outlook
With no end in sight to Yemen’s war, the Red Sea corridor seems likely to remain a high risk trouble spot for commercial shipping. Traffic has plunged as vessels steer clear, despite the naval deployments.
Expert Lucas Tomlinson said unless stronger action is taken, “the Iranians are accomplishing their goal of effectively closing down a critical global trade route by using their Houthi proxies.”
But the US and allies tread carefully around Iran, seeking to revive the 2015 nuclear deal. So far defensive patrols aim to deter Houthi attacks, not escalation by targeting Iranian assets.
58 countries urged the UN Security Council to denounce Iran’s destabilizing regional activities. But any meaningful international response remains elusive, as Russia and China oppose further pressure on Tehran.
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