Protecting the Red Sea

The Red Sea stretches from the Bab-el Mandeb off the coast of Yemen to the Suez Canal in North Egypt (which accounts for 12% of the world trade and about 30% of global container traffic). Earlier, the Red Sea was plagued by attacks from Somalian pirates, but now it has become increasingly dangerous due to attacks on ships by the Houthi rebels based in Yemen.

The Houthis are a Shia political and military organization with a stronghold in northern Yemen and backed by Iran. They are one side of the civil war raging in Yemen for the past decade. Iran has reportedly provided the group with weapons like sea mines, ballistic and cruise missiles, drones etc. They are a part of Iran’s “Axis of Resistance”, which is an anti-West, anti-Israel alliance consisting of Hamas in Gaza and Hezbollah in Lebanon.

The Houthis have carried out missile and drone attacks on ships in the Red Sea in opposition to the Israeli attack on Gaza. They have stated that the attacks will go on if Israel continues the war with Gaza. Houthis have warned that the Red Sea will be turned into a “graveyard” if Israel doesn’t allow supplies of medicine and food into Gaza. Their targeted attacks have disrupted maritime trade, a major cause for concern for many countries.

On December 16, USS Carney shot down 14 drones launched from “Houthis-controlled areas in Yemen” and many missiles and drones launched by the Houthis in the past month. To prevent disruption to the maritime trade, the US has called for a coalition of 10 countries to defend the Red Sea from the Houthis, launching Operation Prosperity Guardian. The other states joining the initiative are Bahrain, Britain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain. However, major Arab nations like the UAE, Egypt and Saudi Arabia have abstained from the alliance. Though India has not formally joined the alliance, it dispatched the INS Kochi and INS Kolkata warships to ensure maritime security in the region.

A security risk in the Red Sea poses a big challenge for the world economy. Many major shipping giants like Maersk, Hapag-Lloyd, Evergreen, and the CMA CGM Group have suspended functions in the Red Sea and are now taking a longer route via the Cape of Good Hope in Africa. Back in 2021, when the Ever Given (a container ship) got stuck in the Suez Canal, it caused a loss of 10 billion USD per day to global trade. This is reflective of the fact that the Red Sea is crucial for global supply chains.

The longer route being taken by ships will cause a delay of roughly two weeks in shipping, leading to higher insurance costs for the ships. Shipping costs have gone up by 20%. A rise in shipping costs will burden the shipping companies, leading to an increase in commodity prices, ultimately burdening the consumers. This will lead to inflation in a world already struggling to cope with post-pandemic-triggered inflation.