Red Sea Ship Protection Alliance: Mitigating Global Economic Impact

2023-12-19 22:46:33

The Houthis opened an unexpected front in the conflict relatively soon after Hamas’ terrorist attack on Israel on October 7 and the subsequent Israeli military action. They have fired rockets at Israel and attacked ships in the Red Sea several times in recent weeks.

In response, the USA forged a military security alliance for the region with international partners, including Great Britain, France, the Netherlands and Italy. Operation “Prosperity Guardian” is intended to protect merchant ships from attacks by the pro-Iranian Shiite militia, which has de facto controlled a large part of Yemen since 2015.

Red Sea: Ship Protection Alliance

Against the backdrop of the Gaza war and increasing attacks on merchant ships in the Red Sea, Israel’s ally USA is forging a military security alliance for the region with European and other partners. Operation Prosperity Guardian is intended to better protect merchant ships from attacks by Yemen’s Houthi rebels, which are backed by Israel’s arch-enemy Iran, the US Department of Defense said.

The initiative is just getting started and it is hoped that it will become even stronger and add more countries and additional resources, said National Security Council Communications Director John Kirby on Tuesday. According to Defense Minister Boris Pistorius, Germany is considering a request to participate.

More expensive freight due to longer routes

Meanwhile, international media reports said on Tuesday that the attacks in the Red Sea had become a serious risk for international shipping, with corresponding consequences for the global economy. Large shipping companies avoid the route via the Red Sea and the Suez Canal.

Archyde.com/US Naval Forces Central Command The US, together with allies, wants to increase its presence off the coast of Yemen

Companies such as the British oil company BP and the world’s largest shipping companies in the transport business of coal, grain and consumer goods, the Mediterranean Shipping Company (MSC) and Moller-Maersk, are in the red because of the risk of attacks on their ships, according to a report by the US business news agency Bloomberg Sea takes long detours.

“Fragile” System

Such detours make freight more expensive. Insurance premiums for ships in the Red Sea are also rising. The price of gas in Europe has risen by 13 percent since the beginning of the conflict in the Gaza Strip, and that of Brent crude oil by almost four percent, Bloomberg reported on Tuesday.

The risks for global supply chains could become significantly greater, it was said, referring to the blockage of the Suez Canal, the important trade connection between Asia and Europe, two years ago: On March 21, 2021, the container freighter “Ever Given” was aground in the Suez Canal and had blocked the route for six days.

APA/AFP/Maxar The “Ever Given” was at an angle and blocked the Suez Canal for days in 2021

The situation back then showed “how fragile” networks are when a connection fails. Evergreen Marine, the shipping company of the “Ever Given”, recently announced that it would no longer accept Israeli cargo for the time being. Germany’s largest shipping company, Hapag Lloyd, is rerouting ships via the Cape of Good Hope at the southern tip of Africa. The freighter “Al-Jasrah” came under fire in the Red Sea on December 15th.

“International challenge”

On Monday afternoon, US Secretary of Defense Lloyd J. Austin announced the alliance for Operation Prosperity Guardian, calling it an “international challenge that requires collective action.” According to US National Security Council spokesman John Kirby, a group of warships from the US 5th Fleet with headquarters in Bahrain is to be strengthened.

APA/AFP/US Navy/Aaron Lau The “USS Carney in combat against drones and missiles in the Red Sea at the beginning of December

“We are pleased that governments around the world have responded promptly with joint efforts on international maritime security and capacity building in this area to bring about a solution,” Maersk said in a statement on Tuesday.

Important bottleneck in international shipping

For the time being, they want to remain cautious: “At this point in time, however, it is difficult to determine the exact time” when the route will be safe to drive again. The Houthis’ attacks on merchant ships such as the Norwegian tanker “M/T Swan Atlantic” threaten a trade corridor through which, according to Bloomberg’s calculations, around twelve percent of maritime trade passes. The Suez Canal is particularly important for the transport of oil.

Another failure in the Panama Canal

In addition, another very important route is currently canceled. The water level in the Panama Canal in Central America is at its lowest level in decades, large ships can only use it to a limited extent, they pile up before entering the connection between the Atlantic and Pacific Oceans, and shipping companies there are now also using much longer and therefore more expensive routes South America.

IMAGO/imageBROKER/Diego Lezama Low water in the Panama Canal is slowing down another important international shipping route

Significantly fewer ships than usual

According to Bloomberg, 56 merchant ships passed through the Red Sea over the weekend, 35 percent fewer than at the beginning of the month. BP said it was diverting tankers, as did the French container shipping company CMA CGM, the Norwegian oil and gas company Equinor, HMM from South Korea and, last but not least, the global number one MSC. However, according to the VesselFinder website, which shows the position of ships, freighters from the shipping companies mentioned were still in the Red Sea.

debate

How does October 7th change the Middle East?

Risk to global supply chains

The International Maritime Organization (IMO) condemned the attacks on the merchant ships on Tuesday. “Attacks on international shipping in the Red Sea are unacceptable,” IMO Secretary-General Kitack Lim said in a statement.

The IMO is a specialized agency of the UN with currently 175 member countries. It sets globally binding rules for international shipping. “I once again call on member states to work together to ensure safe shipping (…) everywhere,” said Kim. The Houthis announced on Tuesday that they would continue their attacks on ships in the Red Sea.

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