Houthi Red Sea attacks pose challenge to global trade

Al-Monitor Pro Members

David Rosenberg

Israeli reporter specializing in business, economics and politics

Dec. 13, 2023

Attacks on Israel-affiliated vessels in the Red Sea by the Houthi rebels in Yemen in recent weeks have raised the risk and cost of shipping goods through this key maritime corridor. Although the Houthis say they are only targeting Israeli ships in support of Hamas in its war with Israel, the complex structure of vessel ownership and management means that companies and individuals from other countries are threatened as well. To date, the impact on global shipping has been limited, but the Gaza war is likely to stretch on for weeks and maybe months, meaning Houthi attacks will probably continue. The result will be more ships being diverted from the Red Sea, and insurance and other costs will increase, especially for Israel. There is also a risk, albeit smaller, that global energy prices will rise.