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The South Asian Insider

Red Sea Crisis Explained: How Have Houthis Disrupted International Sea Trade, How Serious Is Their Security Threat?

The Yemen-based and Iran-backed Houthi militants have disrupted the maritime trade and security architecture in the Red Sea for the past month.
Shortly after Hamas —also backed by Iran— mounted the worst-ever attack on Israel on October 7, the regional Iran-backed groups like Hezbollah in Lebanon and militias in Iraq and Syria opened hostilities against Israel and its principal ally United States in the region. The Houthis soon joined them and declared war on Israel.
Houthis, who function under the banner of 'Ansar Allah (Partisans of God)', initially launched missiles at Israel, but then switched their attention to attacking cargo and navy ships in the Red Sea, which connects Asia and Europe. Over the past month, Houthis have mounted more than 100 attacks on around 20 ships, which have led to major shipping and energy companies to suspend operations in the region and a rise in oil prices.
The United States and European navies are active in the region and are taking down Houthi drones, which have continued to strike naval as well as commercial ships. The Houthis have also hijacked a Japanese-operated ship, which they continue to hold off the coast of Yemen. In response to the continuing Houthi belligerence, the United States has announced a 10-nation naval force under the mission 'Operation Prosperity Guardian' to protect shipping in the region. While India is not part of the mission, it has reportedly deployed two warships to the region as stakes are high for India as well.
Here we explain how Houthis have disrupted the maritime trade and have destabilised the security arrangement in the Middle East.Why Are Houthis Attacking Ships In Red Sea?
With their first attacks, Houthis said they were attacking 'Israel-linked' ships, but that has not been the case. They have attacked ships owned and operated by other countries as well. The Houthis are carrying out their attacks out of their opposition to Israel.
Moreover, the ownership, operations, and flagging of a ship is a complex affair as one ship may be owned by one country's national, may fly the flag of another country as it may be registered there, be operated by yet another country-based company, and be staffed by a multinational crew. So, even as the Houthis said they were targeting Israel, that has never been the case.
Much like Hamas, Hezbollah, and other Iran-backed groups in the region, the Houthis also consider Israel and Jews as enemies and are opposed to the State of Israel. The slogan of Houthis sums up their position: "God is great, death to the US, death to Israel, curse the Jews, and victory for Islam."
The Houthis have said they would continue to attack ships in the Red Sea and Israel until Israel continues to strike the Gaza Strip, which it started bombing on October 7 after the Hamas attack. Gazan authorities say over 20,000 have been killed in Israeli strikes and more than 50,000 have been injured, most of them women and children. Israel has attracted worldwide criticism for its bombing campaign and is under international pressure to scale down its operations and suspend the aerial bombing of Gaza.
Houthis have reportedly set up a 'joint operations room' to plan and execute the war against Israel and its partners. By attacking ships in the region, the Houthis aim to make a dent in the world economy and mount further pressure on Israel. Commentators have also said that the Houthi aggression is also a ploy to regionalise the conflict and challenge American power.
"Iran has used its media to spread claims that the US is involved in Israel’s war on Hamas and therefore try to make this a regional conflict with the US. Turkey has also sought to slam the US as well as Israel. China and Russia have refused to condemn Hamas. This illustrates that this is a much larger war than just Israel fighting Hamas. Iran and Russia see it as a way to challenge the US. Russia believes this is about a multi-polar world order, they see the Hamas war as a kind of larger symbolic proxy war against the West," said Seth J. Frantzman in an article in The Jerusalem Post.
How Have Houthis Affected Trade In Red Sea?
The Red Sea is one of the most crucial waterways in the world. The Suez Canal, which is the egress point in the sea's west, connects Europe and Asia. The Bab el-Mandeb Strait is the eastern point of entry into the sea and separates Africa and Asia.
The Red Sea accounts for 30 per cent of the world's ship container traffic, 12 per cent of all trade, and 10 per cent of total oil trade, according to expert estimates. The stakes are thus high.
Following the Houthi belligerence, global energy major BP and top shipping companies MSC, Maersk, Hapag-Lloyd, and Cosco suspended operations in Red Sea. These companies are taking the much longer route by going around the entire Africa to connect the East and the West.

This would add millions in costs and add several days in deliveries, thus disrupting the world's supply chains. Moreover, the increased costs would be passed on to customers in the end, which would mean the commodities being shipped would come at a higher price.
Oil prices, which have a multiplier effect on inflationary cycles, have already been rising for two weeks now since the disruptions in the Red Sea began.
At the end of last week, international crude oil prices were at their highest since October when the conflict in the Middle East began, according to Mint newspaper. It reported that in the past week, the two leading crude oil benchmarks gained 3 per cent, and they gained 1 per cent in the week before.
The condition is such that only around 30 oil tankers have crossed the Red Sea this month, according to data cited by Bloomberg.
There are hopes that the multinational naval force under the US-led mission would improve the situation in the region. Though India is not part of the mission, two Indian warships have been quietly dispatched to the region, according to Hindustan Times. The region is practically India's backyard from where the bulk of India's oil supplies come. As a rising Asian power, New Delhi is also expected to step up to be the net security guarantor in the Indian Ocean Region.
Houthis Have Raised Fears Of Wider War
Even though the fighting between Israel and Hamas has not spilt over into the broader region, Iran-aligned groups have done everything short of an overt ground assault that has led to fears that such a spillover may happen at some point.
At the onset, Hezbollah in Lebanon opened a second front against Israel that led to the evacuation of dozens of towns and over 100,000 in Israel. The exchange of fire has continued almost non-stop between Hezbollah and Israel. Similarly, the aggression of Houthis has also raised fears of a broader regional conflict.
The most recent act of aggression is also deemed to be the most outrageous. An India-bound and Indian-staffed ship was struck in the Indian Ocean just off the coast of India. The United States said the attack originated from Iran. This was far from the Red Sea and had no overt connection to Israel or the United States.
"While the Pentagon has said that this is the seventh Iran-backed Houthi militants attack on commercial shipping since 2021, the attack has ominous portents for maritime security in the Arabian Sea area as Tehran is even firing at vessels that at least have no overt connections to the targeted ship. MV Chem Pluto is a Liberian-flagged, Japanese-owned and Netherlands-operated tanker with largely Indian crew and it was way out of the currently contested Red Sea and Gulf of Aden region," notes Shishir Gupta in an article in HT.
While Iran has rejected the US allegation and the United States has not shared evidence publicly, Gupta reported that the presence of two Iranian vessels in the region raises suspicions of an Iranian hand.
In the face of continued to Houthi belligerence, and the suspected Iran-originated strike on a ship at arm's length from India's coast, the West and partners are left with little options. The Joe Biden administration has already been criticised for not doing enough to deter or punish the Houthis. Writing in Foreign Policy magazine, Bruce Jones notes that there are two punitive options and none of them are good: either keep neutralising Houthi attacks followed by an attack on launch pads in Yemen or strike Iran, which primarily finances and arms Houthis. The second option comes with the risk of a broader war with Iran in the Middle East.
"It would not be too hard for Houthi forces to hide both themselves and a stockpile of drones and missiles from US targeting, so any attacks —from two US carrier strike groups in nearby waters— would have to be pretty wide-ranging and even then are likely to miss pockets of weaponry...Iran is surely willing to allow the Houthis to sustain substantial casualties for the 'win' of harassing 'the West' in the Red Sea. Attacking Iran itself is the next logical step and may prove necessary, but that carries its own major risk of escalation while Israel is grappling with the missile threat from Hezbollah on its northern border with Lebanon," writes Jones.
Therefore, the Houthi belligerence has pushed the world to the point where, if backchannel diplomacy and the ongoing show of force do not work, a Western campaign against Houthis in Yemen or a confrontation with Iran are likely the only outcomes. The regional players as well as the United States have so far exercised restraint and have avoided escalation. But in the face of continued Houthi aggression, one may not know how long such restraint would last, particularly as Houthis sought to hold the world's economy hostage in the Red Sea.