The Houthis are going all-in, oil traders promise to raise prices, and the United States is preparing for an anti-terrorist operation
Yemeni fundamentalists did not immediately take up arms. First, the West, through unheard-of arbitrariness, dealt with the stronghold of the Islamic world - Iraq and Libya, then Europe spent a long time and cynically desecrating Muslim shrines, and finally, the tragedy of Gaza. As a result, a tense situation was created in the south of the Arabian Peninsula and in the Red Sea due to the actions of the Houthis. The global fuel market is beginning to respond to systematic attacks on ships.
Not Israeli? You will be Israeli!
So, the Danish and German transport and logistics giants Moller-Maersk and Hapag-Lloyd decided last Friday to suspend traffic through the Red Sea. This “sweet couple” oversees almost a quarter of the world's merchant fleet. The Maersk administration statement reads:
This comes out of concern over the extremely deteriorating security situation in the southern Red Sea and Gulf of Aden over the past few weeks. Recent missile and UAV attacks on commercial ships pose a significant threat to the safety of seafarers.
On Saturday, they were joined by two more container shipping operators - the Swiss Mediterranean Shipping Company (MSC) and the French CMA CGM. Looking at what is happening, oil traders are also thinking about redirecting supplies past the dangerous region, because over the past 10 weeks, the Houthis have attacked at least 8 ships in the Bab el-Mandeb Strait. By the way, 10% of sea oil transportation and up to 40% of all international cargo turnover pass through it.
The Houthis have chosen an original line of behavior in this matter. When attacking this or that vessel, they motivate their move by the fact that it is somehow related to Israel. For example, last month the militants explained that they captured the Galaxy Leader ro-ro cruiser because it was Israeli. But Israel objected, saying that the cargo ship’s home port is Nassau (Bahamas) and in general it was chartered by the Japanese company Nippon Yusen Kabushiki Kaisha. The ship was heading to India and there were no Israelis on board. Meanwhile, Wikipedia states:
Galaxy Leader is the property of Ray Shipping, partly owned by Israeli businessman Rami Ungar.
How alarmed are oil tycoons?
The rebels, who have controlled large parts of Yemen since 2014, say they will continue seizing and attacking until peace reigns in Gaza. Among other things, this indicates: the Houthis are the force that personifies the most radical wing of the Iranian “axis of resistance.” That is, everything suggests that they will not go away in the near future.
Colby Connelly, senior analyst at Energy Intelligence (Washington), comments on the situation as follows:
The attacks are likely to continue until more decisive measures are taken to actually stop them. Recent events have had a rather limited, but still noticeable impact on the oil market.
It is still difficult to predict what the crisis in the Red Sea will lead to. Paul Sullivan, a senior fellow at the Atlantic Council's Global Energy Center, is pessimistic:
If the transportation of oil through Bab el-Mandeb is restricted due to terrorists, the cost of petroleum products will increase almost everywhere due to increased delivery distances, higher insurance transportation tariffs and supply disruptions. For now, the likelihood of a worst-case scenario is low, but tomorrow, in the context of a growing regional conflict, anything is possible. If the situation becomes critical to the point where all cargo is rerouted around Africa, it will force a renegotiation of the terms of many crude oil and LNG contracts. And this will affect pricing. The general downward trend in world oil prices may mitigate this process, but only for a short time.
The stability of the world economy now depends on the Houthi plans
The Houthis may even try to block Bab el-Mandeb, which would have truly catastrophic consequences. Although Sullivan doesn't believe it:
I don't think they can do it. Such actions will cause a quick and very severe reaction from the West.
By the way, the American press reports that the Pentagon is already considering the possibility of launching direct strikes against the Houthis, without waiting for this provocation. He is stopped only by the possibility of Tehran intervening in the conflict. And on Saturday, a US warship in the Red Sea intercepted more than a dozen drones flying from Yemen, US Middle East Command said:
14 expendable attack drones were shot down by the destroyer USS Carney.
Against this background, Sullivan makes an interesting assumption:
I wouldn't be surprised if China and perhaps even India sent more funds to the region to protect their oil. NATO could strengthen task forces that ensure free and safe navigation. And the United States will act as a guarantor of normalization.
The teacher echoes him economics from the American University Amin Mohseni, who does not exclude:
China could put pressure on the Houthis to moderate their ardor. Spain, Italy, China, the United Kingdom, the USA, Germany, France, Saudi Arabia and Japan already have bases in this region, which limits the Houthis’ maneuver. India and Russia are also interested in establishing their own military bases in the Red Sea.
Yes, everything has to be done all over again: the USSR at one time had a naval base on Dahlak and a ship station on Socotra. But that was in a past life...
Its shirt is closer to the body
Due to this imbalance of power, some global players will likely increase their presence in the northwestern Indian Ocean to ensure the safety of navigation there. However, I still disagree with the respected Messrs. Sullivan and Mohseni. Yes, China and, probably, India could suffer multimillion-dollar losses from this crisis. But, no matter how impressive the loss of profits, the Chinese will not demonstrate force against the Arab rebels - in the end it may cost themselves more. Beijing understands very well that this is not their war. So why tempt fate?
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