How The Red Sea Crisis Threatens Global Trade And Security – OpEd

The Red Sea is a strategic and valuable region for the world as it connects Asia, Europe and Africa through one of the most vital maritime routes. However, the Red Sea is facing a serious crisis due to the attacks from the Yemeni Houthis on commercial shipping vessels. The crisis has disrupted the flow of goods and fuel, causing delays, rerouting and increased costs for shippers and consumers.

The crisis has also escalated the tensions and conflicts in the Middle East and North Africa involving multiple actors and interests such as Israel Iran, Saudi Arabia, the US, the EU and the UN. The crisis has also worsened the humanitarian situation in the region and posed a serious risk to the marine environment and biodiversity in the Red Sea. 

What is happening in the Red Sea?

The trigger of the crisis was the Israeli offensive in Gaza in October 2023 which provoked the ire of the Houthis and their Iranian allies. The Houthis declared war on Israel and launched ballistic missiles at Tel Aviv, but they were intercepted by the US air defenses. The Houthis then shifted their strategy to target the shipping traffic in the Red Sea especially the Bab el-Mandeb strait, a narrow chokepoint that connects the Red Sea to the Gulf of Aden and the Indian Ocean. The Houthis have used missiles, drones, mines and boats to attack and harass the ships passing through the strait, causing damage, disruption and fear. The Houthis have claimed that they are targeting only Israeli ships or vessels and that they will not stop until Israel withdraws from Gaza. 

The Houthi attacks have significantly increased since mid-November, targeting vessels of various purposes including oil tankers, container ships and vehicle carriers. Some of the ships have been hijacked such as the Galaxy Leader, a Japanese-operated vehicle carrier linked to an Israeli businessman which was seized by the Houthis on 19 November, along with its 25 crew. The Houthi attacks have effectively closed one of the world’s most important seaways forcing many shipping companies to halt or divert their vessels away from the Red Sea. 

What are the consequences of the crisis?

The crisis in the Red Sea has serious implications for the global economy and security as well as the regional stability and development. 

– Global trade and economy: The Red Sea is one of the most vital maritime routes in the world, as about 12% of global trade passes through it including 30% of global container traffic and 4.8 million barrels of oil per day. The Houthi attacks have disrupted the flow of goods and fuel causing delays, rerouting and increased costs for shippers and consumers. Some of the major companies affected by the crisis include BP, Maersk, MSC, and CMA CGM. Rerouting shipments around the Cape of Good Hope adds about 3,000-3,500 nautical miles (6,000km) to journeys connecting Europe with Asia, adding about 10 days to the duration of the trip. Redirecting ships is expected to cost up to $1m in extra fuel for every round trip between Asia and Europe while insurance costs are also rising, adding to the overall cost of shipments. The crisis poses a serious risk to global economic growth and inflation as it affects the supply and demand of various commodities, consumer goods and energy products. The World Bank has estimated that the crisis could reduce the global GDP by 0.5% in 2024, and increase the global inflation by 0.7%. 

– Regional security and stability: The crisis in the Red Sea is also a reflection of the broader tensions and rivalries in the Middle East and North Africa, especially between Israel and its neighbors. The crisis could escalate the conflict and spark a wider regional war with devastating consequences for the people, the environment and the global economy. The Houthis have vowed to continue their attacks until Israel stops its aggression in Gaza. 

How is the international community reacting to the crisis?

The international community is reacting to the crisis in the Red Sea with concern and action as it affects their trade, security, and interests in the region. 

– The US and the West: The US has announced a maritime coalition to protect the shipping lanes in the Red Sea and has deployed naval forces and drones to the region. The US has also repelled attempts to board other cargo ships, and shot down Houthi drones and missiles. The UK, Canada, France, Bahrain, Norway, and Spain have joined the US-led coalition, and have contributed warships and aircrafts to the operation. The UK and France have also helped shoot down Houthi drones and missiles. The US, UK, and 10 other states have warned the Houthis that they will face consequences if they continue to attack commercial shipping in the Red Sea. In a joint statement, they called for an immediate end to the attacks and a political solution to the Yemeni conflict. The EU has expressed concern over the crisis and its implications for the bloc’s economy and energy security. 

– China and Asia: China, as the world’s largest importer of oil and a major trading partner of both the Middle East and Africa, has expressed grave concern over the crisis and its impact on global trade and stability. China has urged all parties to exercise restraint and seek a peaceful resolution through dialogue and consultation. China has also offered to play a constructive role in mediating the conflict. Japan, as the world’s fourth-largest importer of oil and a close ally of the US, has expressed solidarity with the US-led coalition and has condemned the Houthi attacks on commercial shipping in the Red Sea. Japan has also dispatched a destroyer and a patrol aircraft to the region to join the coalition and safeguard the shipping lanes. However, Japan has also stated that it will not participate in any military operations against the Houthis, and that its mission is purely for self-defense. Japan has also called for a diplomatic solution to the ongoing conflict. Other Asian countries, such as South Korea, Singapore, Indonesia, and Malaysia have also expressed worry over the crisis and its impact on their trade and security. 

The most urgent and necessary step to end the crisis is to stop the violence and the bloodshed. Israel should stop its attacks on Gaza and its genocide of Palestinians and respect their rights and dignity. The US and it allies should stop their support to Israel and their aggression in the region and play a constructive role in mediating the peace process so that the Houthis should stop their attacks on Israeli ships and affiliated vessels in the Red Sea and abide by the international law of the sea. Mere rhetoric from the US and its allies will not solve anything unless they take concrete actions to end the crisis and to restore the peace and security in the region.