Red Sea crisis and global trade

Muhammad Mahmood | Published: February 10, 2024 20:20:59

In October last year, in response to the Israeli aggression against the Palestinian resistance movement Hamas, the Yemini Arab resistance movement Ansar Allah (Partisans of God) launched a barrage of missiles and rockets on Israel. Since then, they have been stepping up their attacks firing missiles and rockets on Israeli targets in support of the Palestinian resistance in Gaza.
Ansar Allah (Western media outlets such as CNN, BBC, NYT, FT and the whole host of others call the group as the Houthis) is a political and military organisation that emerged in Yemen in the 1990s as an anti-colonial and anti-imperialist resistance force. To understand this phenomenon, one needs know that Yemen was colonised by various imperial powers including the British for a very long time. The US has recently re-designated Ansar Allah as a "terrorist organisation" in the wake of its armed response against US military strikes on Yemen and in support of the Palestinian resistance against Israeli genocide in Gaza.
Ansar Allah for all practical purposes now controls most of Yemen including its capital, Sana and runs the de facto government in Yemen. Also, most of the Yemenis live in Ansar Allah controlled areas in Yemen. They collect taxes and print money. They are a part of the group in the Arab Middle East known as the "Axis of Resistance" along with Hamas and Hezbollah in Lebanon against the Israeli occupation of historical Palestine and its supporters the US and its European Allies.
Ansar Allah has declared that it is targeting Israeli owned, flagged or operated vessels, or which are heading to Israeli ports (as well as ships sailing from Israel). They have used an array of sophisticated weapons including missile and drones in their attacks on Israel bound and Israeli owned ships in the Red Sea in support of the Palestinian resistance group Hamas in its war with Israel.
They further say that their attacks on commercial and war ships with potential Israeli links are primarily aimed to put pressure on Israel to stop its genocide in Gaza. On November 18, they captured a cargo ship to demonstrate their resolve. As the Israeli armed forces are getting away, quite literally, with committing genocide in Gaza, the task to draw attention to the fact has fallen to others. Ansar Allah's spokes person Mohammad Abdusalam clearly outlined the policy that "there was no threat to international navigation in the Red and Arabian Seas, and the targeting will continue to affect Israeli ships or those heading to the ports of occupied Palestine."
In fact, Ansar Allah along with Hezbollah are the two principal Arab resistance movements that have taken a clear stand on the current Israeli-Hamas war in support of Hamas and dared to tell the truth about Palestinians suffering and to stand up for the Palestinians.
As the Yeminis took a defiant position against Israel, it automatically drew in the US in support of Israel and things have suddenly started to change. Any armed opposition against Israeli aggression and occupation of Palestine automatically draws in US military response in support of Israel. Therefore, any armed resistance against Israeli occupation automatically entails a fight with the US.
On January 12, the US and the UK launched a naval operation to support and protect Israeli ships in the Red Sea targeting multiple sites across Yemen in response to the attacks on Israel bound ships. These US and UK attacks on the Yeminis have much wider agenda; it will also help Israel to continue to defy the International Court of Justice ruling asking Israel to stop genocidal slaughter in Gaza.
These attacks further send a clear message to Israel that the US and European allies will continue to stand by Israel come what may and whatever Israel does including committing genocide on Palestinians in Gaza. The rejection of calls for any and all ceasefires is the most obvious evidence of this. To put this simply, these US attacks on Yemen are about supporting Israel's genocidal slaughter in Gaza and attempts to maintain its waning control of the region called the Middle East. But the current US bombing spree against not only Yemen but also Syria and Iraq won't reverse the decline of US primacy in the Middle East.
According to the Age (February 7) "In Gaza, meanwhile, Hamas has begun to re-emerge in some of the most devastated areas after Israeli forces pulled back, an indication that Israel's central goal of eliminating the group remains elusive. Video footage from the same areas shows vast destructions - nearly every building has been damaged or destroyed."
While the US insists it is not seeking conflict in the region, its sole purpose in the region is to overthrow the Syrian and Iranian governments--the two governments in the Middle East region that have remained steadfast in their support for the Palestinians. The Yemenis are no stranger to war and bombing. Ansar Allah withstood the prolonged military actions of neighbouring countries who were militarily helped by the US. Overtime, they have become much stronger in military terms. Now once again they are defying the US.
Sympathy for the Palestinians transcends the internecine strife and rivalries that divide Yemen. So, Ansar Allah is mustering a great deal of goodwill even from Yemenis who otherwise will oppose them. Also, that they are now withstanding the US and its allies' airstrikes is another feather in their cap.
The US and the UK bombing campaigns were condemned by Russia and Turkey and called the operation illegitimate as these attacks on Yemen were done without the approval of the US Security Council. Turkish President Recep Erdogan accused both the countries seeking to turn the Red Sea into a pool of blood.
According to Reuter, "The analysis (made by Reuter) shows how Houthi drone and missile activity has escalated since the Gaza war began, and has continued despite Western military air strikes on their bases in Yemen, which began on January 11".
While Ansar Allah forces initially attacked only Israeli-linked ships in the Red Sea in solidarity with Palestinians, now it expanded their attacks to include British and US ships after Washington and London launched air strikes in Yemen. They now say the expanded attacks, which have disrupted global trade, will stop when Israel ceases war in Gaza.
The Red Sea situation has very dangerously worsened only after the US-led attacks on Yemen that started on January 11 as reflected in a statement made by Amr Al-Samadouni, Secretary General of International Transport and Logistic Division at the Cairo Chamber of Commerce on January 2, 2024. He said that tensions in the Red Sea Region caused by Ansar Allah group did not significantly affect navigation in the Suez Canal.
It is also to be noted that according to Aljazeera, Israel the first direct intended target of the Houthis, has already felt an impact from the disrupted maritime trade. Traffic through its southern port of Eilat, located in the city which is also a tourist destination, has come to a halt, and the foreseeable future seems uncertain as the war rages. At the same time Chinese container ships continue to ply through the Suez Canal without any hindrance.
Now because of the US attacks on Yemen and their military response to those US attacks and likely future attacks, many of world's largest shipping companies have diverted their vessels away to a much longer route around the Africa's Cape of Good Hope and then up the West coast of Africa.
According to S&P Global Market Intelligence nearly 15 per cent of goods imported into Europe, the Middle East and North Africa were shipped from Asia and the Gulf by sea. That includes 21.5 per cent of refined oil and more than 13 per cent of crude oil. Also, included in the list are all sorts of consumer goods such as electronics, clothing and footwear. This detour of ships via the Cape of Good Hope will add about 20 extra days for goods to reach European ports. This is already reflected in the declining trade volumes compiled for Europe.
According to the Kiel Institute for the World Economy's (IfW Kiel) trade indicators for December show that exports from and imports into the EU dropped by 2 per cent and 3.1 per cent respectively. The report further adds that the US saw a 1.5 per cent decline in exports and 1.0 per cent fall in imports, even though the Suez Canal route plays a much lesser role for the US than for Europe.
The IfW also indicated that world trade plunged by 1.3 per cent from November to December 2023 as result of the attacks in Red Sea and the volume of containers transported via the Red Sea had plummeted by more than half as of December and is currently almost 70 per cent below the volume that would normally be expected.
Europe and countries in the Mediterranean region are poised to suffer the most losses if the US-led aggression against Yemen continues. The situation is likely to persist in the longer term, as many of the ships taking cargo to and from those countries have been affected.
In fact, a prolonged conflict in the Red Sea and escalating tensions in the Middle East risk devastating effects not only in Europe and the Mediterranean region but on the global economy as well. The World Bank has already warned that the crisis now threatens to feed through into higher interest rates, lower growth, persistent inflation and greater geopolitical instability.
The Financial Times summed up the current Red Sea situation quite succinctly in an article titled "Risk of reliance on US to protect global shipping" and said "The attacks in the Red Sea may not impact globalisation all that much, but they stand as a reminder that, for now, world trade remains dependent on the US: an unpredictable military superpower whose geopolitical stances, such as its support for Israel, are themselves a source of insecurity".
muhammad.mahmood47@gmail.com