Yoselina Guevara López
On January 29th, Yemen’s Shiite Houthi militias stated that they attacked a U.S. military vessel in the Gulf of Aden, in the southern Red Sea. Likewise, the shipping company Maersk assured this January 24 that two of its merchant ships were attacked by the Yemeni Armed Forces; these ships were carrying U.S. military equipment and could not enter the Red Sea. The Yemeni armed forces confirmed that they will continue to prevent Israeli shipping, as well as vessels bound for the ports of occupied Palestine in the Red and Arabian Seas, until the aggression ceases and the siege on the Palestinian people in the Gaza Strip is lifted.
The Yemeni armed forces, led by the Houthi militias, with their actions in the Red Sea are dealing a mortal blow to the heart of world capitalism. The mechanism is simple: they prevent the transit of large ships carrying goods from the East to the West in the Gulf of Aden and the Bab al-Mandab strait, thus blocking the short route to the Suez Canal, forcing them to take a longer route.
However, it should be noted that for the Houthis, the current situation allows them to open up prospects for negotiations with Saudi Arabia and, at the same time, to seek a distraction from the growing discontent of the population, which is demanding solutions to the disastrous conditions in the country. Likewise, in the event of a regional escalation of the Israeli-Palestinian conflict, the Houthis could also find themselves involved in a new phase of fighting of such intensity that it could frustrate their efforts to resist the confrontation with the southern authorities and the Saudi-led coalition, with the certainty of losing the consensus they enjoy in the northern part of Yemen.
Economic consequences of the Red Sea crisis
The Red Sea area dominated by Yemeni armed forces is a vital artery for world trade, with 12-15% of the world’s goods and around 30% of container traffic passing through it. In the first half of 2023 alone, 8.8 million barrels of oil and 116 million cubic meters of liquefied natural gas passed through the Red Sea per day. In fact, at least 20% of European oil and gas imports pass through there.
On the other hand, the situation in the Red Sea is already translating into higher prices for European consumers, given the longer time and higher costs of shipping. Normally, it takes about 27 days for a container ship to reach the port of Rotterdam (Europe’s largest) from Shanghai via the Suez Canal. However, by not being able to use this passage, the new route via the Cape of Good Hope lengthens the voyage by an additional seven to ten days.This translates into 30% more, according to calculations by the shipping platform Flexport; but the problem does not end there because the trips could take up to thirty days longer, depending on the type and size of the vessel. To amortize the costs, several shipowners have already applied surcharges of hundreds of dollars per container, with additional increases for ships originating or bound for Israel. As for the transit of ships, the number of vessels using the Red Sea route has been reduced from 400 to 250. Likewise this decline in the flow of goods from East to West and vice versa has caused not only the jump in commodity prices, but also the slowdown of Tesla’s production in Germany and Suzuki’s in Hungary.
Advantages for Xi Jinping’s China
At the geopolitical level, China is not a key player in the Israeli-Palestinian conflict, but it is quite convenient for Beijing to send its merchant ships to the Mediterranean Sea through the Houthi-controlled Bab al-Mandab channel, a 32-kilometer-wide strait that connects the Red Sea to the Indian Ocean. However, unlike other countries, the Asian giant can exploit two wild cards or rather two trade routes that would allow it to circumvent the conflict in the Middle East. The first, shared with Russia, is a purely maritime route, the so-called Arctic Route, and the second is the new Silk Road in Central Asia, with its railroads running from China to Europe, which can serve as a viable alternative to shipping goods by sea to their final destinations in Europe.
For now, international trade has shown resilience first with the global Covid-19 pandemic, then with the war between Russia and Ukraine; but it has yet to show resistance to the missiles that are putting maritime transport to the test. After all, it will be the citizens, as always, to put their skin in the game, facing the high prices of goods and services, and most regrettably losing their lives for wars for which no one has asked their opinion or consensus.
Yoselina Guevara López: Venezuelan social communicator, political analyst, columnist in different international media, whose work has been translated into English, Italian, Greek and Swedish. Winner of the Simon Bolivar 2022 National Journalism Award (Venezuela), special mention Opinion; Anibal Nazoa 2021 National Journalism Award (Venezuela); I Comandante Feliciano 2022 Historical Memory Contest (El Salvador) Third place. Twitter: @lopez_yoselina