Tag: israel

Tensions in the Red Sea have extended to Yemeni land after the United States and the United Kingdom led bombings against multiple sites controlled by the Houthi armed group on Thursday night.

The Houthis have carried out dozens of attacks on commercial vessels that they say are linked to Israel, and that were passing through the 30km (20-mile) wide Bab-el-Mandeb strait. They demand that Israel stop the bombardment of Gaza and allow humanitarian aid.

A US-led coalition is trying to deter the Houthis by positioning destroyers and other military platforms in the Red Sea and by shooting down the Yemeni group’s missiles and drones. But the Houthis have been clear that they have no intentions of stopping until Israel ends its war, which has killed nearly 24,000 Palestinians.

Traffic through the Red Sea is down by more than 40 percent disrupting global supply chains. Some of the world’s largest shipping operators have redirected their vessels around the Cape of Good Hope on the southern tip of Africa, delaying delivery times and adding a further 3,000-3,500 nautical miles (6,000km) to their route.

But just how much have the Houthi attacks impacted Israel’s economy itself? And how are they affecting global trade?

What’s happening in one of the world’s busiest maritime routes?

So far, at least 26 vessels have been attacked by Houthis since they seized the Israeli-linked Galaxy Leader vessel in November.

US warships in the region have thwarted several other attacks by the Houthis, with the latest being on Wednesday when the US and UK shot down missiles and drones. The UN Security Council on Wednesday condemned the Houthi attacks.

The Red Sea connects Asia to Europe and the Mediterranean, via the Suez Canal. Currently, around 12 percent of the world’s shipping passes through the Red Sea, averaging around 50 ships a day, carrying between $3bn to $9bn worth of cargo. In total, the value of goods passing through the route is estimated at more than one trillion dollars per year.

Are all shipping vessels affected?

Container shipping appears to have been hardest hit. However, data released by Reuters earlier this week appeared to show that the passage of oil tankers had barely been affected.

Data cited from MariTrace showed that, during December, an average of 76 oil freighters were to be located in the Red Sea, only two fewer than the previous month’s average, Other trackers reported a marginal increase over the same period.

In early January, the Houthi rebels announced that, should a vessel wishing to transit the area declare its ownership and destination in advance of entering the waters, it would not be fired upon.

Maersk and Hapag-Lloyd have since denied reaching any agreement with the rebel group.

Have the attacks undermined Israel’s reputation as a secure trading partner?

As of mid-December, Israel’s only Red Sea Port, at Eilat, reported an 85 percent drop in activity since the attacks began.

While the bulk of Israel’s marine traffic comes through the Mediterranean ports of Haifa and Ashdod, exports of Dead Sea potash, as well as imports of Chinese manufactured cars – which make up 70 percent of Israel’s EV sales – are reliant upon Eilat.

For many carriers, the risks to both vessel and crew are significant. This week, Chinese state-owned carrier Cosco joined with its subsidiary, OOCL in suspending shipments to Israel.

However, Brad Martin, a former US Navy captain and a director of the Institute for Supply Chain Security at the RAND Corporation cautioned against overstating the challenge before Israel.

“Red Sea shipping disruption, and even some shippers declining Israeli cargo, will not bring Israel to its knees economically,” he wrote by email.

“Flow through the Mediterranean will likely continue unimpeded. Israel is probably in a better position for absorbing disruption than most of its neighbours. However, shipping and trade can become subject to diplomatic and political action, so economically damaging isolation could certainly occur on that front,” he said.

What might the longer-term impact be?

While analysts have agreed that the direct impact of the Houthi rebel attacks on Israel’s economy has been limited, the longer the disruptions continue, the greater the repercussions might be.

One acute vulnerability may be Israel’s ambitions to establish itself as an exporter of Liquid Natural Gas (LNG) of which it holds a small but growing share of vital international market.

“Prior to the attack (of October 7), Israel was on its way to becoming a reliable gas exporter,” Gabrielle Reid, an associate director at risk consultancy S-RM, said.

“But, the hostilities have exacerbated the political risk of doing business in Israel and further jeopardise the outlook for the Eastern Mediterranean region as a potentially important player in global natural gas markets,” she said.

What has been the effect elsewhere?

According to Clarkson Research Services Ltd, traffic through the Red Sea is currently down 44 percent on that recorded during the first half of December, as increasing numbers of vessels take the longer route around the Cape of Good Hope to reach harbour.

As well as the obvious costs of increased fuel and manpower, this carries increased insurance costs and can lead to delays, as congestion at ports takes its toll.

According to Drewry World Container Index, which tracks shipping along eight major routes between US, Europe and Asia, the cost of transporting a 40-foot (12-metre) container from China to Europe is expected to increase by 248 percent from $1,148 in November, when the attacks began.

Depending upon how shipping companies respond, Simon Heaney, a senior manager in container research at Drewry, told Al Jazeera that overall costs could increase anywhere between 3 and 21 percent.

Delays will also be a significant factor, as much of the “Just In Time” manufacturing processes in developed economies, where goods are delivered moments before they are needed, struggle to adapt to interruptions.

How might this impact the global economy?

While current demand for manufactured goods from countries such as China and India remains lower than during the peak of the pandemic, any change in cost or disturbance to shipping schedules is likely to carry consequences.

However, while increases in transport costs can lead to inflation – the International Monetary Fund estimated that chaos in shipping routes during the pandemic led to a 1 percent increase in global inflation –  that has not happened yet, economists have suggested.

Beirut, Lebanon – Yemen’s Houthis will not be deterred by United States-led attacks on them in retaliation for their targeting of Israel-linked ships in the Red Sea, and could in fact be emboldened further, say analysts.

On Thursday night, the US and the United Kingdom bombed multiple sites in Yemen that Washington said were Houthi facilities, a day after they shot down missiles fired by the Yemeni group in the Red Sea. The bombings are the first time during this war that the US or its allies have attacked Yemeni territory.

But the Houthis could gain from a raised regional and domestic profile, as the world’s sole superpower takes on a group that is not internationally recognised as the government of Yemen despite controlling large parts of the country, say experts.

On January 10, the US and the UK repelled 21 drones and missiles in the Houthis’ largest operation yet on Red Sea traffic. And the United Nations Security Council, with the world’s most powerful nations, focused on the attacks on Red Sea ships, in a resolution that condemned the Houthis – but also underscored their growing influence as a force to reckon with.

“The Houthis actually won that confrontation the day they started it,” Abdulghani al-Iryani, a senior researcher with the Sanaa Center for Strategic Studies, told Al Jazeera.

Popular within Yemen

Within Yemen, Ansar Allah, the formal name of the Houthi group, controls the west, including the Bab al-Mandeb strait that leads into the Red Sea, and is fighting for territory against the internationally recognised government of Yemen and its domestic allies.

The group’s actions in the Red Sea, along with its messaging about supporting the people of Gaza, have been immensely popular among Yemenis, bolstering recruitment and allowing it to mobilise massive rallies in support of the Palestinian people.

The Houthis say they are intercepting Israel-bound and Israeli-owned ships passing through the Bab al-Mandeb strait to pressure Israel to at least allow sufficient humanitarian aid into the Gaza Strip, which Israel has pounded for the past three months.

The Israeli war on Gaza following an October 7 attack by Hamas and other armed Palestinian groups has killed more than 23,000 people, most of them civilians, some in direct bombings and others as a result of the dire conditions the enclave has been plunged into by Israeli actions.

The Houthis grabbed global attention on November 19, when they commandeered the Galaxy Leader cargo ship and subsequently turned it into a tourist attraction.

While global shipping has been deeply affected, with major shipping companies avoiding the Red Sea altogether, the Houthi interceptions have caused minor damage to most ships and have avoided killing or injuring anyone on board.

On December 31, four Houthi vessels tried commandeering a ship travelling through the Red Sea when US Navy helicopters attacked them, killing 10 Houthi fighters and sinking three boats.

In early January, the Houthis began using unmanned surface vessels. In the past, the group has used them as drone boats that explode on impact with other vessels. While the group has changed tactics, they have not stopped their activity in the Red Sea, on the one hand, analysts say, because their declared aim has not been achieved, and on the other, because they do not fear US threats.

“The Red Sea front has entered the next level – the direct clash between the Houthis and the US,” Eleonora Ardemagni, a senior associate research fellow at the Italian Institute for International Political Studies, told Al Jazeera. “Both the US and the Houthis are respectively testing the effects of their moves and how far they are willing to go.”

Air attacks will not deter the Houthis

In response to an ultimatum from Washington and its allies to stop Red Sea activity or incur their military wrath last week, the Houthis held an enormous rally in Yemen’s capital Sanaa where bombastic speeches from the group’s leaders declared themselves ready for US escalation.

“Everything that was worth striking has been struck by the Saudi coalition in the past nine years,” al-Iryani said, referring to the war waged against the Houthis by a Saudi-led coalition that began fighting the Houthis in 2015 after they had overthrown President Abd-Rabbu Mansour Hadi, head of the internationally recognised government.

“I don’t think [US attacks on Houthi targets] are going to act as a deterrent to the Houthis,” Raiman al-Hamdani, a researcher at the ARK Group and a former visiting fellow at the European Council on Foreign Relations, told Al Jazeera. “Considering the Houthis’ rhetoric of always blaming the United States and Israel for the problems that exist in Yemen and in the Middle East in general, I think they’d be quite happy.”

Strategically speaking, al-Iryani said, the Houthis should also be quite comfortable. The Houthi mobile infrastructure should make picking targets more difficult for the Americans, he said.

Making peace with neighbours

Meanwhile, the Houthis are still in talks with neighbouring Saudi Arabia over a long-term ceasefire and analysts say they may be trying to strengthen their hand through the Red Sea show of power.

The Saudis have been keen on preventing an escalation in Yemen and, in December, Riyadh urged the US to exercise restraint. Saudi Arabia doubled down on that message of caution after Thursday night’s attacks on Yemen.

Instability next door would not benefit Saudi Arabia, which has had its oil infrastructure badly affected in past Houthi attacks. The Saudis may also have longer-term considerations in these negotiations, in that it would benefit them to build relations with the Houthis and may be on track to recognise them.

“Formal recognition may be the most important thing to [the Houthis],” al-Hamdani said. “The group’s main concern is to continue consolidating power over the country.”

To date, the Houthis have drawn support from Iran as part of their regional Axis of Resistance, along with Hamas, Hezbollah and a network of militias in Iraq and Syria. “The Houthis … have developed a relationship with Iran that many analysts consider to rival that Iran possesses with Hezbollah,” Yemen researcher Nicholas Brumfield told Al Jazeera.

But analysts say the group should not be seen as an Iranian proxy and, in the future, the Houthis may look to recalculate their regional alliances. “It’s going to be better for them to be close to the Saudis,” al-Hamdani said, adding that they could benefit more by “relying on [Saudi Arabia’s] financial resources rather than depending on Iran for weapons”.

The Houthis’ identity as a Shia group does not mean that they will fall under Iranian influence by default – the long historical and cultural ties between Yemen and Saudi Arabia can play a pivotal role between the two.