Red Sea crises | Op-ed | Security Lense | 18-Aug-2024
Global maritime trade is the backbone of the world economy, ensuring the circulation of goods, raw materials, and energy resources across nations. Indispensable to this interconnected network is the Indian Ocean Region (IOR), which plays a vital role in facilitating international trade.
The IOR acts as a dynamic maritime corridor, connecting producers and manufacturers with consumers globally. Its strategic location enables efficient and economical transportation of goods between Asia, Africa, the Middle East, and beyond. Being the home to three established nuclear powers and one potential nuclear power, the Indian Ocean has been a central trade arena for centuries. Approximately 90,000 vessels, carrying 80% of the world’s maritime oil and 9.84 trillion tons of cargo, traverse the Indian Ocean each year, crossing through its critical choke points to reach global destinations.
The strategic significance of the Indian Ocean in global supply chain lies in its four critical choke points: the Malacca Strait, the Strait of Hormuz, the Strait of Bab al Mandeb, and the Mozambique Channel. These chokepoints are crucial to international trade, with even minor disturbances causing significant impacts on global shipping. A disruption at one chokepoint often affects trade volume at others, intensifying the economic and security challenges in these vulnerable areas.
One such critical chokepoint is Bab al Mandeb, connecting the Gulf of Aden to the Red Sea. The Red Sea is a strategically significant maritime corridor linking Europe, Asia, and the Middle East, handling about 12% of global trade, valued at billions of dollars. Its strategic importance is primarily anchored in the Suez Canal, which joins the Red Sea to the Mediterranean Sea, making the Red Sea a pivotal artery for global trade.
However, the Red Sea faces dire threats from violent non-state actors, such as the Houthis in Yemen, posing substantial challenges to maritime security in the region. These groups often target commercial shipping, naval vessels, and port facilities, disrupting trade and potentially causing economic and humanitarian crises.
A surge occurred in the threat from the Houthis in the Red Sea, when Israel began its military operation against Hamas in Gaza in October 2023. Initially, the Houthis launched a long-range ballistic missile at Israel, which got intercepted by the US. By mid-November 2023, the Houthis shifted their attention to attack merchant vessels, starting with the hijacking of the vessel Galaxy Leader and continued with assaults in the lower Red Sea and the Strait of Bab al Mandeb using drones, missiles, and gunmen on speedboats.
Since October 19, 2023, the Houthis have targeted nearly 80 ships in the Red Sea and Gulf of Aden with missiles and drones, disrupting global trade. By April 2024, the Houthis had launched 164 missiles and 265 drones at 79 ships, hitting 29 merchant vessels, sinking one, and killing three seamen. The Houthi maritime operations have evolved through various phases, characterized by changing patterns in the location and targets of their attacks, spreading from Israel to the Red Sea and the Gulf of Aden. The targeted ships started from attacking primarily Israeli vessels to those with connections to Israel, the US, and UK.
Among these attacks, one of the most prominent incidents was the sinking of the British owned Rubymar cargo ship in the southern Red Sea. Recently, Yemen’s Houthi militia claimed responsibility for two more drone and missile attacks on a US warship and a commercial ship in the Red Sea, vowing to continue striking ships in international waters near Yemen’s borders in support of Palestinians.
In a television broadcast, Houthi military spokesman Yahya Sarea stated that the houthi militia’s naval forces launched a “precise” missile strike on the US Navy destroyer USS Mason in the Red Sea. Sarea did not specify when these attacks occurred or the extent of human casualties or damage. However, in response, the statement came a day after US Central Command reported that the USS Mason shot down an incoming anti-ship ballistic missile launched by the Houthis.
The sprouting Red Sea crisis is having worst impacts on the global maritime trade and supply chain. The first major impact is the significant decline in trade through the Suez Canal, causing shipping lines to reroute their vessels around the Cape of Good Hope, resulting in much longer journeys. By the end of March 2024, traffic volume through the Suez Canal and Bab al Mandeb Strait had dropped significantly, while navigation via the Cape of Good Hope had increased by 100%. According to UNCTAD, by the first week of March 2024, the gross tonnage of vessels arriving at the Cape of Good Hope increased by 85% and containership arrivals by gross tonnage surged by an impressive 328%.
Seadistance.net (2024), reports that circumnavigating Africa adds 4,575 nautical miles and 12 days to the sailing time between Shanghai and Rotterdam, assuming an average speed of 16 knots. Despite the additional costs and time involved, most large container carriers have suspended operations in the Red Sea.
The second major impact of the Red Sea crisis on maritime trade is the change in freight rates and surcharge practices. The crisis has significantly affected spot freight rates. Higher freight rates are attributed to capacity being absorbed by the longer Cape route, additional fuel costs, and negative shipper expectations regarding future capacity availability. J.P. Morgan Research estimates that these disruptions will lead to 0.7 percentage surge in global core goods inflation and 0.3 percentage increase to core inflation during 2024.
The escalating Red Sea crisis has not gone unnoticed due to its severe implications for the global supply chain. Initially, in response to Houthi attacks, US, French, and British warships shot down Houthi drones and missiles. In December 2023, the US announced the formation of a coalition of countries to patrol the southern Red Sea to safeguard vessels from attacks. This coalition, named Operation Prosperity Guardian (OPG), includes the UK, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles, and Spain.
Moreover, on January 11, 2024, the US and Britain began bombing dozens of Houthi-linked targets in Yemen. In addition to Operation Prosperity Guardian, the European Union launched its own naval mission on February 19, 2024, to protect cargo ships in the Red Sea. This mission has deployed European warships and airborne early warning systems to the Red Sea, Gulf of Aden, and surrounding waters.
Despite all countermeasures, the Houthis have shown no signs of stopping until their demand for a ceasefire agreement in Gaza is met. Recently, the Houthis stated that American and British airstrikes would not deter them from supporting the Palestinians and vowed that their attacks would continue. This indicates that the Red Sea crisis is unlikely to end soon, emphasizing the need for a collective effort by global powers to address the situation in Gaza and mitigate the ongoing threats to international trade.
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