Houthi Attacks on Red Sea Shipping Causing Ripple in Global Economy
Egypt’s Suez Canal and economy is threatened, and African ports are becoming overwhelmed by diverted ships.
Egypt’s Suez Canal has been an important artery for global commerce since it opened in 1869.
Now, this lifeline is being threatened as the Houthis, the rebel group backed by Iran who control most of northern Yemen. In the wake of the Oct. 7th terrorist attack on Israel, these militants have been using drones and missiles to target ships sailing in the Red Sea.
Subsequently, several important shipping and oil companies are now avoiding the Suez Canal, a development that will impact the speed and expense related to global trade.
The Suez is a vital artery for container ships and fuel tankers. Goods and fuel from Asia and the Middle East have made their way to Europe and the United States through the passage since it opened in 1869. Britain and other world powers have fought wars and engaged in geopolitical intrigue over the canal, controlled by Egypt now, for more than a century.
The Suez is a vital artery for container ships and fuel tankers. Goods and fuel from Asia and the Middle East have made their way to Europe and the United States through the passage since it opened in 1869. Britain and other world powers have fought wars and engaged in geopolitical intrigue over the canal, controlled by Egypt now, for more than a century.
About 50 vessels go through the Suez Canal a day, and recent data suggested that, as of Monday, at least 32 had been diverted, said Chris Rogers, head of supply chain research at S&P Global Market Intelligence. He noted that nearly 15 percent of European imports were transported by sea from Asia and the Persian Gulf, most of which go through the Suez.
Peter Sand, chief analyst at Xeneta, a shipping market analytics company, described the problems in the Red Sea and the canal as “a slow-burning disaster that really blew up on the weekend.” He added, “Everybody involved in global shipping, especially with supply chains connected by the Suez Canal, is trying to find out where their goods are, where they are heading.”
One nation that is immediately impacted by the Houthi’s war on Red Sea Shipping is Egypt. Legal Insurrection readers may recall my stories on the last significant problem with the Suez Canal, which occurred when a ship became lodged in the narrow passage. Egypt’s estimated losses were $100 million from the six-day crisis.
This current disruption is even more of a threat, and Egypt intends to enhance its profile in the region to respond.
Beyond revenue loss, the diminishing traffic poses a significant image problem for Egypt, a country that views the canal as a national symbol. Authorities in Cairo have previously invested many efforts to secure the canal against potential threats from jihadist organizations. The potential threat from Houthi attacks may force Egypt to abandon its low-profile stance and take action to minimize the damage.
. . . . The current situation is different and could lead Egypt to coordinate with the U.S. and deploy military action against Houthi targets if the Canal continues to suffer. Public sentiment in Egypt may support such measures, given the Canal’s paramount importance. However, diplomatic avenues will likely be explored before resorting to military force.
Reports suggest that Oman is conveying messages to the Houthis on behalf of third parties, including Egypt, but as of now, there has been no response from the Yemeni rebels.
Egypt is also expected to join an international coalition, led by the U.S., to protect shipping traffic in the Red Sea and the Arabian Sea, along with other Arab nations like Jordan and Saudi Arabia.
African ports, to which the ships are being rerouted, are becoming overwhelmed.
South Africa’s major ports, including Durban, one of Africa’s largest in terms of container volumes handled, as well as Cape Town and Ngqura ports are among the worst performing globally, a World Bank 2022 index released in May found.
“Even the state that Durban is in now, it is still the most advanced and largest port in Africa, so ships rerouting around the continent have very limited choices for berthing for replenishment,” Alessio Lencioni, a logistics and supply chain consultant told Reuters.
Other large African deep-water ports along the Cape route, such as Mombasa in Kenya and Dar es Salaam in Tanzania are too ill-equipped to handle the expected traffic over the next couple of weeks, Lencioni said.
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Comments
We ought to be able to defend ourselves against the Houthis. General Biden, an adviser to Israel’s war against Hamas, lost to the Taliban and is now losing to the Houthis.
I seem to remember some Marines landed in Africa to take care of a problem with hijackings over 200yrs ago. Why are we not shooting the hell out of those pirates where they live and sinking their boats no questions asked?
If worse comes to worst, the US can always send a carrier battle group to the area as a show of force. That will scare them off.
Oh, okay, already done that. Well, send another. What? We have two there already?
Well then, Joe Biden can put his foot down and say, “Don’t!” That’ll stop ’em dead in their tracks. Or else they’ll die laughing.
As a last resort, there is always good ole’ Kamala Harris who can throw a word salad at them.
Gee, Jefferson was able to deal with Muslim pirates with wooden ships.
A sane society would just bomb Yemen off of the planet. Completely remove that country from existence. This is a sick joke. And Traitor Joe is basically aligned with the Yemenis (as they are with Joe’s buddies, the Iranians) which is why they are allowed to do all this. In fact, Iran is just getting more and more money from Traitor Joe and his junta as they do this.
Treason. I have lost count of the number of treasonous acts Traitor Joe and his gang have committed against America. Maybe … someday, the House will find the courage to start impeaching these lowlifes … Maybe …
Qatar and Iran also should have been seriously dealt with, for their decades-old financing and support for global Muslim terrorist groups. That these two malignant regimes are perennially treated with undue deference and kowtowing by the vile Dhimmi-crats, is indefensible and despicable. So, naturally, they continue to facilitate Muslim terrorism and their attacks against U.S. and allied interests.
As someone who served during the Iran hostage crisis, it seemed sureal that a backward country held the US at bay while an inept American President launched a bungled rescue.
Here we are again. Same country, same region and we look like fools.
FJB
Yemen has every right to control the Red Sea, as does Somalia, Eritrea, and Djibouti. Where does Egypt get off laying claim to the Red Sea?
Given that the rich countries who control nearly all natural resources are affected, these counties should be willing to pay the additional costs for their capitalistic interests.
To deny these other countries their control of the Red Sea is on par with denying Palestine’s right to exist and not be under the thumb of colonizers, just because they ship materials through the Suez Canal – which by the way is miles and miles north of Yemen.
(OK, I tried! I just couldn’t unlock the liberal mindset that it takes to believe the bullshit I just stated)
I was worried about you after reading the first paragraph but it is a valid point, I think. Considering the vitality of the shipping lane I don’t think any nation should be able to claim it. We are about to go through this with China and their artificial islands in the South China Sea which Brandon has been ignoring.
(Almost) everything was better under Trump. *change my mind*
It’s a matter of perspective. If you’re an authoritarian in China, Iran, Venezuela, Afghanistan, or Yemen, for instance, things are much better under Biden.
Unfortunately we are in a period of uncertain transition in use of Naval assets for gun boat diplomacy. Since the Falklands campaign modern Navies are very wary of anti ship missiles and rightly so. Today drones, particularly swarms of drones, can be used to overwhelm or at a minimum deplete the counter measures giving anti ship missiles far better odds. Not to mention the cost differential between drones and the counter measures expended; roughly 500/1 for a $2K drone v $1 million+ anti air missile. Add in the issue of replenishing the stock of anti air missiles while at sea or the vulnerability of a supply/store ship. Now more resources must be expended to provide escorts. Then factor in wear and tear, deferred maintenance due to keeping all these ships on station, then the length/frequency of deployments for the crew and the relatively small number of ships to begin with. All in all folks need to be ready to internalize the US isn’t at the same level of strength we were even a decade ago. That has consequences for our ability to exert hegemony.
It’s so galling watching the utterly witless, emasculated, feckless and incompetent dhimmitude of these vile Dhimmi-crats. They’re simply ideologically incapable of responding to brazen Muslim belligerence, supremacism, terrorism and Islamofacsism in a serious and substantive manner. To do so violates their ethos that Muslims are an allegedly victimized class, and, their terrorism is a response to allegedly legitimate transgressions committed against them by non-Muslims.
IMO, this is an easy problem to deal with, if you are anyone but Biden. Tomorrow have a bombing run on Iran’s oil facilities, together with a warning that it will be repeated every day the Houthis interfere with shipping.
That would cause an immediate large spike in the price of oil and the political and military uncertainty/tensions would cause a drop in stock market values. In the medium term it would cause transportation costs of all kinds to spike making all goods even more expensive for consumers.
It would also escalate attacks by Iran and their proxy b/c once you destroy the vulnerable port facilities used to receive, store and transfer oil for shipment they are gone. You lose the leverage of that option once you actually do it. That act will be opposed by pretty much every other Nation and most will openly condemn those actions.
In sum attacking Iran directly will hurt the economy, cause more price inflation, PO our allies who depend on mid east oil and further isolate the US. Does that mean we shouldn’t do i? No we had ample justification in the two decades of the GWOT when Iran was directly attacking us in the sandbox but Bush, Obama and Trump understood the ramifications of hitting the oil infrastructure of Iran so they didn’t do it. Not to mention the potential for undermining the growing internal, domestic Iranian people resistance/opposition to the Iranian regime by creating an opportunity to ‘rally around the flag’. Then add the potential for widespread terror attacks in the West generally and the US in particular in retaliation. There’s not an easy, clean or simple solution to the issue.
” You lose the leverage of that option once you actually do it”
There are so many other options when it comes to Iran, I think it is about time that we exercise all available options on Iran. If we did so, there would no longer be a problem with Iran.
Well sure there are a whole range of individual options to choose from but the kinetic ones can only really be done once, assuming they are done completely. I am NOT saying don’t use them but we must do so with a full understanding of potential known consequences and be willing to accept the consequences that flow from the exercise.
For example if we directly attack Iran that has a host of potential consequences. In addition to those I listed earlier is the potential for OPEC+ to embargo oil or perhaps to demand something other than US dollars as payment or maybe just begin a slowdown in production to put oil prices into an equilibrium above their break even ($80ish for Saudi) and below the level needed for long-term profitability of fracking.
Another potential consequence might be to unite the ‘Arab world’ which would happen on a surface level anyway if only for an effort by the Arab regimes to play to domestic audience and try to forestall potential unrest by domestic groups. Again we shouldn’t let others determine how we choose to react BUT we do need to be honest enough to accept that the US is militarily weaker than in the past and that there will be consequences, some of them known and some unforseen, that we must be willing to endure as a.result of the actions we take.
As this article notes the Houthi control most of northern Yemen and use that as their base for attacking the commerce in the Bab el-Mandeb with strong support from Iran. It will take boots on the ground to destroy the Houthi’s missiles and their forces in the area. Why should the US sacrifice lives and money to protect the assets of middle east countries and the economic interests of European countries? The EU wants to be seen as a world power. Well let them step up and demonstrate it.
The Saudis are probably willing to do it if the US tells them it’s OK and won’t result in sanctions.