Mint Explainer: Why Yemen’s Houthi rebels are a risk to global trade

 The Houthis, supported by Iran, have committed to continue their assaults on shipping in the region. REUTERS    THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY/File Photo (via REUTERS)
The Houthis, supported by Iran, have committed to continue their assaults on shipping in the region. REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY/File Photo (via REUTERS)

Summary

  • Four of the world's biggest shipping firms have halted operations in the Red Sea, causing economic ripple effects

New Delhi: Attacks by Yemen’s Houthi militant group on vessels traversing the vital Red Sea shipping route have posed a significant threat to the global economy. The Houthis, supported by Iran, have committed to continue their assaults on shipping in the region. These attacks, involving missiles and drones against cargo ships, are declared by the Houthis as acts of solidarity with Palestinians amid the conflict between Israel and the Hamas militant group in Gaza. In response to the threats, the US has mobilised its partners to take on the crisis and form an international naval force. Mint takes a look at the crisis and India’s stakes in it.

Who are the Houthis?

Originating from northern Yemen, the Houthis have been embroiled in a decade-long civil war, gaining significant territorial control, including Sanaa, the capital. The Houthis are considered close to Iran and have maintained a hardline stance against Israel and the US. The group was labeled a terrorist organization by the US.

Why are the Houthis targeting shipping routes?

Since mid-November, the group has launched a series of attacks on shipping vessels in the Red Sea and the Bab-el-Mandab. They have attacked an estimated 12 shipping vessels so far. The Houthis have announced that the goal of this campaign is to punish Israel for its military strikes against Gaza, which have killed thousands of people. The group also undertook direct attacks on Israel by launching missiles towards the country. However, these efforts are understood to have had limited success, which may explain the new focus on disrupting shipping. They say the attacks will continue till Israel ends its campaign in Gaza and allows humanitarian aid to reach Palestinians

What is the rationale behind these attacks?

Experts suggest that the group wants to ride a wave of sympathy for Palestinians in the Middle East by taking on Israel. This has given them much popularity in the region. It also allows them to cut a striking contrast to many governments in the region, who are criticised by the general public for doing little to help the Palestinians. The Houthis may hope to use this popularity to win legitimacy for their control over northern Yemen.

What are the global economic implications?

The Houthi attacks on the Red Sea shipping routes threaten to disrupt the global economy. The route allows trade to pass through the Suez Canal. The canal, which opened in 1869, is a vital link between Eastern and Western economies. Rather than sail around Africa, ships can carry their cargo faster through this canal. Now, the Houthi attacks on ships passing through this route have scared global shipping companies. Four of the world's biggest shipping firms have halted operations in the Red Sea, causing economic ripple effects.

How will this impact India?

India sees a significant amount of its maritime trade flowing through the Suez Canal-Red Sea route. Long delays in shipping, estimated between 19 and 30 days currently, could disrupt supply chains. Energy prices have jumped in recent days as the Red Sea route is also essential for oil and natural gas transports. The price increases are a risk to India's import bill given that India imports vast quantities of oil and gas for domestic use.

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
more

topics

MINT SPECIALS