Crisis in the Red Sea for Dummies

By Federico Fo, 7 minutes.

On November 19 2023, the cargo ship “Galaxy Leader” was hijacked and seized by the Houthi rebels, officially known as Ansar Allah, as it transpassed the international waters of the Red Sea, off the coast of Yemen. The Houthi group, backed by the Islamic Republic of Iran, claimed it conducted the ship’s hijacking due to the alleged links the ship’s goods had with Israel. Thus, the group justified the hijacking with the need to show solidarity with Palestinians in Gaza who, over the last months, have been under heavy attack and bombardment by the Israeli Defence Forces. Moreover, the group has announced its intention to continue attacking cargo ships related to Israel until the ceasing of military operations in Gaza.

https://en.wikipedia.org/wiki/Houthi_movement#/media/File:Yemeni_Civil_War.svg; in Green the area controlled by the Houthi in Yemen at the time of September 2023 in the context of the Yemeni civil war; work by Ali Zifan, created on 2015 and uploaded on 3 February 2024; No change made; Creative Commons: https://creativecommons.org/licenses/by-sa/4.0/;

This article will explore the consequences on the world economy and Geopolitics that the Houthis’ actions in the Red Sea have had so far. Consequently, this article will analyse the reactions that the different countries of the world had towards the attacks of the Houthi group.

From an economic point of view, the Houthi attack has alarmed firms all around the world, with many of them fearing further attacks with the potential to disrupt the supply of goods. This has caused a large number of firms to reorganise their supply chains, destabilising the world economy. The latter happened as the Red Sea is responsible for about 12% of world trade and for about 30% of the whole cargo trade in the world. Some of the world’s major shipping companies have suspended operations in the Red Sea entirely, thus increasing delays of supply of goods for an extremely high number of firms worldwide.

The Cargo ship Galaxy leader in the port of Bremerhaven; work by Garitzko; created on 20 December 2006; https://commons.wikimedia.org/wiki/File:Car_carrier_Galaxy_Leader.jpg?uselang=en#Licensing;No changes made.

Because of the economic and strategic importance that the Red Sea has for global cargo traffic, many countries have decided to intervene in order to re-stabilise the supply lines across the region. As a first measure, the US, which already have a naval presence in the area, have created an international naval coalition under the name Operation Prosperity Guardian (OPG). The coalition, initially announced by the US secretary of defence, Lloyd Austin, comprises about 20 different countries under US leadership.

Nevertheless, the coalition’s composition has not been very outlined so far. Indeed, out of the 20 members just 13 have decided to disclose their membership in the coalition, with the rest keeping a more anonymous status. Moreover, out of the 13 members that shared their membership, just few have shown a real commitment to its operations. In fact, many countries such as the Netherlands and Norway have decided to provide rather small numbers of naval officers to the OPG. Apart from the United States, just France, Greece, Italy and the United Kingdom have committed naval vessels to the operation. In other words: although the OPG is consolidated on paper, in reality it is much more fragile. This is due to the absence of some key actors in the Red Sea within the coalition, and also because of internal divisions and disagreements regarding the leadership.

Indeed, many analysts have pointed out the absence of some regional actors from the coalition, such as Egypt and Saudi Arabia. Their absence, has been argued, is connected to the Gaza conflict. In fact, there is a high risk that the joining of the coalition by these two might increase tensions within the already highly destabilised Islamic world. Moreover, countries which have an actual naval presence in the Red Sea, such as Italy, France and India, have decided to not put their ships under US-leadership. In other words: they decided to collaborate with the OPG rather than fully committing to it. This is because these countries fear that the naval task force led by the USA might escalate the conflict in the area. Consequently, this could lead to all the countries whose ships have joined the OPG's operations to get involved in possible proxy wars initiated by the US.

Despite his allies’ fears, President Biden has unexpectedly been very reluctant to allow direct operations against Houthi forces in the Red Sea initially because of his fear of escalating the war to other major players in the area such as Iran. This is why officers on the field argue that the US should take a more cautious deterrence approach rather than one of direct confrontation vis-à-vis with the Houthi group. Such deterrence has been explained by U.S. Navy Rear Admiral Mark Montgomery, that shall consist in deterrence by denial (that is to intercept attacks) and deterrence by punishment (that is to retaliate and, thus, disencourage attacks).

Notwithstanding this more cautious approach, the fears felt by the US administration have shown to be credible at last. In fact, Iran deployed a warship in the Red Sea after the US forces sank 3 out of 4 Houthi boats which were trying to hijack the cargo ship Maersk Hangzhou on the 31st of December 2023. They followed an increase of tensions in the area, leading to a higher risk of conflict escalation in the Middle East.

Afterwards, the USA, under pressure from economic actors who have an interest in keeping the Red Sea route safe, have finally decided to take more tangible action. Between the night of the 11th of January and the morning of the 12th of January 2023, UK and the US forces have jointly bombed logistic infrastructure knots of the Houthi military in Yemen. Such bombings aimed at undermining Houthi operations in the Red Sea, limiting the Houthis range of action. While the effectiveness of these bombings remains to be evaluated, it is worth noting that the Houthis have demonstrated resilience in the face of bombings, as evidenced by their conflict with the Saudis, where they emerged as the victors.

The guided missile destroyer USS Gravely (DDG 107) in Norfolk in 2013; The ship has been used in operations against the Houthis drones in the Red Sea; work by D.L. Paul Farley; https://www.dvidshub.net/image/953226; https://commons.wikimedia.org/wiki/File:Gravely_Visits_Greece_130611-N-MO201-035.jpg?uselang=en#Licensing ; created on 10 June 2013; No change made.

As the USA and UK continue to run operations against Houthi targets, the present situation in the Red Sea continues to evolve. Meanwhile, the EU has begun to plan its own operations in the area under the name of Aspides, which is predicted to start its operations in the near future under Italian leadership.

As a result, there is a high likelihood that new actors may become involved in the future, attracted by the economic significance of the Red Sea in global trade. Because of this continuous evolution, tensions in the area have become something which is highly volatile. The Red Sea emerges as a pivotal arena where the flows of global power dynamics converge. This is particularly notable given the United States' need to make complex decisions regarding military deployment, prioritising engagements in strategically vital regions like the Indo-Pacific.

To conclude, the developments in the Red Sea deserve to be carefully observed as they may have significant impacts on more regions of interest across the globe. The conflict has a direct impact on global trade and the overall security situation within the Middle East. On a larger scale, it represents yet another point of friction as the global balance of power continues to shift and realign itself.