Risks to shipping in the Red Sea
Iran asserts its dominance over Gulf trade routes, and China benefits
Ed: Please see the follow up piece, here
On 19 November, the Ansar Allah (Houthi) Movement announced that it had seized an allegedly Israeli-owned vessel named Galaxy Leader, a Bahamas-flagged vehicle carrier owned by Israeli billionaire’s Rami Unger’s Ray Shipping and managed by Stamco Ship Management Co. The ship was en-route from Türkiye to India. This is the third ship owned by Unger that has been targeted by Iran or its allies in the past two years. 52 crew members are reportedly being held, with the Houthi Movement investigating their identities. Any Israelis will certainly not be released at least until the Gaza war is over.
This operation reflects several dynamics:
Iran dominates Yemen’s coast along the Red Sea, the Strait of Hormuz, and likely has anti-ship missiles in Gaza and/or Lebanon that can reach the Suez Canal. As such, all shipping in the region is conducted at Iran’s pleasure.
Shipping related to Israel - that is, owned by Israelis, or carrying cargo headed to Israel, or carrying cargo owned by Israelis, or leased by Israelis, or leased from Israelis, or from Jews supporting Israel or holding Israeli nationality - is now at risk of attack, seizure, or targeting.
The objective is to enforce a hard and soft blockade against Israel - while it is impossible for the Houthi to target every ship relating to Israel, the idea is to target enough ships to force commercial entities - traders, insurers, shippers, etc… to investigate each vessel for links to Israel as part of their due diligence, duty of care and responsibility towards shareholders.
This is an important indicator for any future potential energy embargo, intended to highlight to regional Gulf Arab states that, if Iran calls for an energy embargo against the West over its support for Israel, regional countries should be aware of the potential cost of non-compliance.
The US, having ignored previous Ansar Allah and Iranian attacks targeting international shipping, has shown itself either unable or unwilling to act upon its traditionally understood role of guarantor of freedom of shipping.
The uncomfortable reality is that the US is no longer able to police the seas. The US has three options: accept a reduced role, rely on proxies to fight its battles, or escalate directly and accept the ensuing damage to the US’ budget, prestige and relations with the rest of the world.
In the Gulf region, the US is unable to use proxies - all local Gulf Arab states realise that Iran can strike their energy, aviation, port, power and other infrastructure at will, as Iran demonstrated during the 2019 ARAMCO attacks. They will not fight Iran on the US’ behalf, but instead will seek direct US involvement. Saudi Arabia went as far as to accept Chinese mediation between it and Iran, at a time when the US’ relations with China and Iran were at historic lows. Other Gulf Arab states will also assert their strategic autonomy.
The US is now in a bind - either it escalates dramatically and directly to regain respect for its role as policeman of the seas, or it accepts that the seas in Iran’s neighbourhood are subject to Iran. This would invite China, Russia and other powers to mimic Iran’s tactics to assert similar claims.
Meanwhile, Iran is continuing to escalate, with daily attacks by its proxies against US forces in Iraq in Syria.
If the US gets directly involved against Iran, the key question for the security of Gulf Arab states will be whether they will allow the US to use their territories against Iran.