How Russia And China Will Try To Exploit The Houthi Red Sea Blockade

-Analysis-

While the complex history of Yemen involves struggles between the north and south, separatist movements, and the presence of terrorist organizations like al-Qaeda, one of the central concerns in the current geopolitical landscape is that the Houthi rebels are sponsored by Iran. The Houthi organization, following a similar model to the Iranian proxy Hezbollah, operates in alignment with Tehran’s objectives.

Their late leader, al-Houthi, was a disciple of Ayatollah Khomeini, who has ruled Iran for decades, and Hezbollah leader Hassan Nasrallah. Since at least the beginning of the Arab Spring, the Houthis have done nothing but fulfill the tasks set before them by Tehran.

The Houthi rebels are now blocking the Red Sea by striking or seizing merchant ships, affecting supplies to more than 50 states. They are also attempting to launch rockets into Israeli territory. This has prompted a significant military response from the U.S and Britain, which was announced on Thursday evening. All of this which comes with potentially significant consequences for global security.

The Houthis have gained control over the strategically vital Bab-el-Mandeb strait, which links Yemen to Djibouti and Eritrea in Africa, and connects the Red Sea with the Gulf of Aden and the Indian Ocean. This narrow passage is a crucial conduit for transporting approximately 250 million tons of oil and oil products annually, with a significant portion flowing from Middle Eastern countries to Europe.

Compounding the issue, on the northern side of the Red Sea lies the Suez Canal, another pivotal global transport route through which goods from Western companies traverse from the Mediterranean Sea to the Indian Ocean. Collectively, the Red Sea, along with its interconnected waterways, constitutes around 10-15% of global maritime trade, and this critical trade route is currently disrupted by the Houthis’ actions.

Destruction of the global economy

At present, merchant vessels face only two viable transportation alternatives: circumnavigating the Cape of Good Hope, incurring an additional 14 days of transit time, or navigating the Northern Sea Route, which is predominantly under Russian control and operational for only a few months each year.

Numerous shipping companies, including global entities such as the Mediterranean Shipping Company, the German transport firm Hapag-Lloyd, and the Danish container company Maersk, have already announced intentions to alter their shipping routes. The decisions have wide-reaching implications for logistics, fuel reserves, and flight costs, consequently leading to an increase in freight costs and insurance premiums.

The Houthis have not only survived but also increased their influence in Yemen.

Given that the Red Sea is a crucial passageway for transporting energy resources (oil and liquefied gas), food, fertilizers, industrial goods, and textiles, the ongoing crisis, if not swiftly addressed, has the potential to exacerbate global inflation and further reduce the volume of international trade, already diminished by 1.5%. Simultaneously, escalating oil and gas prices may lead to decreased consumption, particularly impacting European industries, potentially instigating a recession that has, for the time being, been postponed.

Why is it difficult to defeat the Houthis?

The Houthis constitute a paramilitary group boasting an arsenal of more than 120,000 fighters, armed with drones, ballistic missiles (e.g., Ased with a range of 400 km), and anti-ship cruise missiles (e.g., Al-Mandeb 2). Over the years, Iran has consistently supplied them with modern weaponry. Despite a coalition of more than 10 Arab countries, led by Saudi Arabia and supported by the U.S. and UK, conducting military operations against them for more than five years (from 2016 to the present), the Houthis have not only survived but also increased their influence in Yemen.

In 2019, the group, equipped with Iranian drones, targeted facilities of the global oil giant Saudi Aramco, resulting in a brief but significant 10% increase in global oil prices.

Remarkably, Iran and the Houthis allocate considerably fewer resources to the confrontation in the Red Sea compared to the substantial investments the U.S. and UK have made. The cost-effectiveness of the militants’ combat drones, priced at just over ,000, contrasts sharply with the hefty price tag of a missile equipped on a British destroyer, which reaches .2 million. If the confrontation persists, the coalition is likely to face challenges in sustaining their ammunition, as indicated by a report from the British Royal Joint Institute for Defense Research.

Moreover, the deployment of American and British warships in the Red Sea itself proves to be a financially burdensome undertaking.

Gaza and the Arab factor

The Houthis portray their actions defending Gaza and the Palestinian people, and fighting Israel. But the reality is more straightforward: they are executing Iran’s directives, which aim to create additional challenges for the U.S. and its allies in the region. Tehran’s strategy involves turning the Arab world against the U.S., which staunchly supports Israel.

A year ago, it would have been difficult to imagine Saudi Arabia or the United Arab Emirates not participating in a coalition led by the U.S. against Iranian proxies such as the Houthis. Yet only Bahrain has joined the temporary alliance alongside the U.S., Great Britain, Canada, the Netherlands and Australia.

This situation demands serious attention from the international community.

The reluctance of Saudi Arabia, the regional leader, to counter Iran can be attributed to several factors. Riyadh is hesitant to showcase support for Israel and its allies, fearing potential backlash from its own population. Other countries in the region share similar concerns. They aim to curb Iran’s influence but are wary of displeasing their citizens.

Additionally, Saudi Arabia has engaged in diplomatic and economic rapprochement with Iran through mediation with China. The Saudis aim to maintain cordial relations with Iran, which is actively developing missile and drone programs and is on the path to creating a nuclear bomb.

Meanwhile, Saudi Arabia is currently benefiting from the ongoing confrontation as the rising oil prices contribute to the faster implementation of Crown Prince Salman’s Vision 2030 program for the country’s reconstruction. But the possibility remains that the Houthis might eventually target both Saudi Arabia and the UAE, given the U.S.’s use of their airspace for airstrikes.

Russian and Chinese interests

At first glance, the escalating tensions in the Red Sea appear to be counterproductive for both Russia and China. While Russia faces challenges in sending oil to India, a major importer, it benefits from the resulting surge in oil and gas prices. Conversely, China, amid a slowing economy, would prefer to avoid an increase in energy prices. Despite these apparent drawbacks, both nations seem to have a strategic plan aimed at undermining the U.S.’s position in the Middle East, particularly as Russia engages in conflict with Ukraine and potential tensions loom between China and Taiwan. Additionally, the ripple effects are impacting Europe significantly.

Xi Jinping and Vladimir Putin appear to share a cohesive plan: weaken Europe’s economy, divert its resources away from supporting the U.S., and keep it occupied with internal affairs and security concerns. Simultaneously, their strategy seeks to fracture the unity between the U.S. and EU, as well as complicate relations among the U.S., EU and the Arab world.

Despite these geopolitical maneuvers, pro-Iranian proxies in various regions have already targeted American military bases, including the U.S. embassy in Iraq.

The situation in the Middle East is deteriorating further, with additional challenges emerging in Yemen, Lebanon, and Syria. Iran, supported by China and Russia, is intensifying its efforts to weaken the U.S. and its European and Asian allies. The repercussions are already extending to Ukraine and are likely to exacerbate global security and economic crises. This situation demands serious attention from the international community.