The international mission in the Red Sea has been initiated in response to the escalating maritime safety issues caused by the increasing attacks from the Houthi rebels, which have been causing disruptions in global trade. The severity of these attacks, some of which have damaged vessels, has prompted several shipping companies to instruct their ships to remain stationary and avoid entering the Bab el-Mandeb Strait until the security situation improves.
U.S sends military ships in Red Sea
As part of this mission, military ships are being deployed not necessarily to escort a specific vessel, but to provide a protective cover to as many vessels as possible at any given time. The primary aim of this mission is to ensure the safety of commercial vessels in the Red Sea and to maintain the uninterrupted flow of global trade.
The U.S. and its allies are seriously considering a more assertive stance against the Houthi rebels in Yemen, backed by Iran. They’ve recognized that the existing task force may not be enough to counter the threats to shipping in the vital Red Sea waterway.
U.S partners with other nations
In response, the U.S., along with several other nations, is putting together a new force named “Operation Prosperity Guardian”. The mission of this force is to protect ships in the Red Sea from drone and missile attacks launched from Houthi-held areas in Yemen. Defense Secretary Lloyd Austin announced this initiative during his visit to Bahrain. The intensity of these attacks, some of which have caused damage to vessels, has led shipping companies to suspend their operations in the Bab el-Mandeb Strait until the security situation improves.
These are serious attacks, says Secretary Austin
Secretary Austin emphasized the seriousness of these attacks, which have forced many shipping companies to instruct their vessels to avoid the Bab el-Mandeb Strait until the security situation is under control. This mission will be overseen by Combined Task Force 153, a unit established in April 2022 to bolster maritime security in the Red Sea, Bab el-Mandeb, and the Gulf of Aden.
U.S. Ambassador Linda Thomas-Greenfield’s statement
U.S. Ambassador Linda Thomas-Greenfield highlighted the ongoing threat to navigational rights, international maritime security, and commerce in a letter to council members. She stressed that the Houthi attacks on commercial vessels legally traversing international waters continue to threaten navigational rights and freedoms, international maritime security, and global commerce. Meanwhile, three U.S. warships, including the USS Carney and the USS Mason, are patrolling the Bab el-Mandeb Strait to deter and respond to Houthi attacks. However, the Security Council has discussed the issue without taking immediate action.
Geopolitical tensions in Sea
Rising geopolitical tensions are adding pressure to an already strained oil market, with concerns about OPEC’s commitment to production cuts and fears of increased supply, especially from the U.S. Crude prices have dropped by nearly a fifth since late September due to oversupply worries and limited regional impact of the Israel-Hamas conflict.
Major impact on oil shipments
The Red Sea, a key oil trade route, has gained importance for Russian oil shipments to Asia after European buyers rejected them following Ukraine’s invasion. Despite a temporary halt in shipments from the Baltic port of Primorsk, Russia’s seaborne crude exports continue to rise.
The futures curve for Brent and WTI suggests supply is outstripping demand, with both in a bearish contango until mid-next year, indicating the market expects supply to exceed demand for a while.
Continuous attacks in the Red Sea by Houthis
The Red Sea is seeing increased security measures due to escalating Houthi attacks. An international mission, “Operation Prosperity Guardian”, has been launched to protect the 400 commercial vessels transiting the area. However, the Houthis’ chief negotiator, Mohammed Abdel-Salam, has pledged to continue targeting Israel-linked vessels.
In response, shipping company Maersk is rerouting its ships around Africa via the Cape of Good Hope, a longer and less efficient route. Over the past month, Houthi militants have attacked or seized commercial ships 12 times and are currently holding 25 crew members of the MV Galaxy Leader hostage in Yemen.
Pressure on Oil Rates due to Red Sea tensions
In the world of oil, it’s been a steady couple of days. Prices have seen only minor fluctuations, despite the growing unease among traders and shippers about possible disruptions in the Red Sea. Brent, the global benchmark, has been comfortably sitting around $79 a barrel, having risen by more than 3% in the last two sessions. Meanwhile, West Texas Intermediate has held its ground near $74.
However, Tuesday brought a significant uptick in prices, continuing the upward trend from the day before. This spike was sparked by attacks on ships in the Red Sea, carried out by Houthi militants from Yemen who are backed by Iran. These attacks have thrown a wrench in maritime trade, forcing companies to rethink their shipping routes.
According to a report by Reuters, Brent crude climbed by 71 cents, or 0.9%, to hit $78.66 per barrel by 1512 GMT. The U.S. West Texas Intermediate crude for January, set to expire on Tuesday, rose by 88 cents to $73.35. Not to be outdone, the more actively traded February contract increased by 94 cents to reach $73.75. It’s a dynamic landscape, reflecting the complex interplay of geopolitics and market forces.
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