Houthi Attacks in the Red Sea

The Houthi Movement, also known as Ansar Allah, is a Shia rebel group in Yemen founded in the early 1990s that aims to combat the perceived marginalisation of the Zaidi Shia community. The group initiated a rebellion against the Yemeni government in 2004 and seized the capital, Sanaa, in 2014.

In 2015, a Sunni and Arab coalition led by Saudi Arabia intervened in the Yemeni Civil War, supporting the largely Sunni Yemeni government with airstrikes, ground troops, and backing from various Arab nations. It is almost certain that Tehran views the Houthis as a force multiplier in its regional proxy war with major Sunni rivals such as Saudi Arabia, which enables it to engage with the Sunnis or the West with a high degree of plausible deniability.

The Houthi Movement has also become part of Iran’s “axis of resistance” against Israel. While Iran denies direct connections, there is widespread belief and anecdotal evidence that Tehran provides political, financial, and military support to the Houthis, best evidenced by their arsenal of Iranian-derived weaponry.

The suspected Iranian facilitation of lethal aid into Yemen has enabled the Houthis to acquire a credible arsenal of weapons that can target vessels, aircraft, and strategic locations throughout the region. Past Houthi attacks demonstrate their acquisition of various advanced weaponry, including long-range systems such as uncrewed aerial systems (UAS) or drones, short-range and medium-range ballistic missiles (SRBM/MRBM), anti-ship cruise missiles (ASCMs), and a diverse array of air defence systems.

With such an advanced arsenal, it is highly likely that Iran views the Houthi Movement as a proxy force that enables it to send strategic messages, influence rival powers, demonstrate Iranian capability and as a deniable force that can deliver strategic effect at the tactical level. Consequently, it is highly likely than Tehran is leveraging the group to exploit the current situation in the Middle East to achieve some of its own aims, namely uniting multiple elements against Israel and the West on multiple fronts. However, whilst Tehran exercises a high degree of control over the Houthis, its influence is not absolute and the prospect of independent Houthi activity provoking an escalation cannot be discounted.

Since the inception of the war, the Houthi Movement has championed the Palestinian cause and demonstrated its capability to target the southern areas of Israel with ballistic missiles and drones. However, what has been of far more importance to external actors is the militant group’s ability to influence international shipping in the Gulf of Aden, Red Sea and the Bab-al-Mandeb- the southern entrance to the Red Sea.

The Hamas-led attacks in southern Israel on October 7, 2023, resulted in an estimated 1300 deaths, and around 200 hostages were taken to Gaza, prompting significant international shock and condemnation. The severity of the attack has unified a nation previously grappling with civil unrest behind a military operation in the Gaza Strip.

The Israel Defence Forces (IDF) has now conducted hundreds of airstrikes on Gaza and has launched a ground offensive into the exclave, enabling it to secure parts of northern Gaza whilst committing to further offensive operations in the south. The conflict, as reported by the Hamas-run Gaza Health Ministry, has caused over 20,000 Palestinian deaths, creating a humanitarian crisis amid limited public services due to the combined effect of an Israeli blockade and IDF operations.

Since the inception of the Israel-Hamas war, there have been major concerns that a seemingly isolated conflict could trigger a series of miscalculations or escalations that could raise the risk profile across the Middle East and lead to global ramifications. Observed and potential consequences include increased civil unrest, attacks by Iranian proxy groups, and actions by violent extremist organisations (VEOs) across the region.

IDF operations have triggered responses from Iranian-backed militant groups in Lebanon, Syria, Iraq, and Yemen which threaten to escalate the war into a broader conflict. Whilst Israel is almost certainly most concerned by Lebanese Hezbollah opening a second front in southern Lebanon, the Yemen-based Houthi Movement undoubtedly gives the most unease to international observers. -based Houthi Movement.

Access the complete report below, or click here to download.

INTRODUCTION

The Hamas-led attacks in southern Israel on October 7, 2023, resulted in an estimated 1300 deaths, and around 200 hostages were taken to Gaza, prompting significant international shock and condemnation. The severity of the attack has unified a nation previously grappling with civil unrest behind a military operation in the Gaza Strip. The Israel Defence Forces (IDF) has now conducted hundreds of airstrikes on Gaza and has launched a ground offensive into the exclave, enabling it to secure parts of northern Gaza whilst committing to further offensive operations in the south. The conflict, as reported by the Hamas-run Gaza Health Ministry, has caused over 20,000 Palestinian deaths, creating a humanitarian crisis amid limited public services due to the combined effect of an Israeli blockade and IDF operations.

Since the inception of the Israel-Hamas war there have been major concerns that a seemingly isolated conflict could trigger a series of miscalculations or escalations that could raise the risk profile across the Middle East and lead to global ramifications. Observed and potential consequences include increased civil unrest, attacks by Iranian proxy groups, and actions by violent extremist organisations (VEOs) across the region. IDF operations have triggered responses from Iranian-backed militant groups in Lebanon, Syria, Iraq, and Yemen which threaten to escalate the war into a broader conflict. Whilst Israel is almost certainly most concerned by Lebanese Hezbollah opening a second front in southern Lebanon, the Yemen-based Houthi Movement undoubtedly gives the most unease to international observers.

WHAT IS THE HOUTHI MOVEMENT AND WHAT IS THEIR INTENT? 

The Houthi Movement, also known as Ansar Allah, is a Shia rebel group in Yemen founded in the early 1990s that aims to combat the perceived marginalisation of the Zaidi Shia community. The group initiated a rebellion against the Yemeni government in 2004 and seized the capital, Sanaa, in 2014. In 2015, a Sunni and Arab coalition led by Saudi Arabia intervened in the Yemeni Civil War, supporting the largely Sunni Yemeni government with airstrikes, ground troops, and backing from various Arab nations. It is almost certain that Tehran views the Houthis as a force multiplier in its regional proxy war with major Sunni rivals such as Saudi Arabia, which enables it to engage with the Sunnis or the West with a high degree of plausible deniability. The Houthi Movement has also become part of Iran’s “axis of resistance” against Israel. While Iran denies direct connections, there is widespread belief and anecdotal evidence that Tehran provides political, financial, and military support to the Houthis, best evidenced by their arsenal of Iranian-derived weaponry. The suspected Iranian facilitation of lethal aid into Yemen has enabled the Houthis to acquire a credible arsenal of weapons that can target vessels, aircraft, and strategic locations throughout the region. Past Houthi attacks demonstrate their acquisition of various advanced weaponry, including long-range systems such as uncrewed aerial systems (UAS) or drones, short-range and medium-range ballistic missiles (SRBM/MRBM), anti-ship cruise missiles (ASCMs), and a diverse array of air defence systems. 

With such an advanced arsenal, it is highly likely that Iran views the Houthi Movement as a proxy force that enables it to send strategic messages, influence rival powers, demonstrate Iranian capability and as a deniable force that can deliver strategic effect at the tactical level. Consequently, it is highly likely than Tehran is leveraging the group to exploit the current situation in the Middle East to achieve some of its own aims, namely uniting multiple elements against Israel and the West on multiple fronts. However, whilst Tehran exercises a high degree of control over the Houthis, its influence is not absolute and the prospect of independent Houthi activity provoking an escalation cannot be discounted. 

Since the inception of the war, the Houthi Movement has championed the Palestinian cause and demonstrated its capability to target the southern areas of Israel with ballistic missiles and drones. However, what has been of far more importance to external actors is the militant group’s ability to influence international shipping in the Gulf of Aden, Red Sea and the Bab-al-Mandeb- the southern entrance to the Red Sea. 

On 19 November, the Houthis seized the Israeli-linked vessel, MV Galaxy Leader, whilst underway in the Red Sea and brought it back to Yemen. The Houthis used a helicopter to land on the vessel’s deck, a novel and unprecedented attack methodology for militant groups in the region. Since the seizure of the Galaxy Leader, the Houthis have conducted a series of drone and ASCM attacks on merchant shipping in the area, and several projectiles launched from Yemen have been intercepted by US, UK and French naval assets operating in the region. However, there is not currently enough military assets in the region to provide sufficient air-defence coverage to mitigate against the extent of the threats posed by the Houthis.

To date, there have been at least eleven successful or attempted attacks on merchant vessels resulting in several incidents of damaged vessels, most of which have no direct or obvious links to Israel. The current pattern of Houthi attacks in the Red Sea suggests that the militant group is no longer limiting its attacks to vessels attributed to Israel. The Houthis are now likely aiming to influence wider Western interests, a move that has almost certainly been endorsed by both Iran and Hamas, and one that invariably raises the risk profile to any ship transiting the area.

EFFECTSON SHIPPING FROM HOUTHI ATTACKS

Despite the fact there have been no reported instances of fatalities or major damage sustained to vessels, the attacks have already influenced the operations of several major shipping companies. Goliaths of the shipping industry, such as MSC, Maersk and Hapag Lloyd have prohibited their vessels from transiting through the Red Sea and Bab-al-Mandeb. The oil and gas giant, BP has also paused all its Red Sea shipments and will likely be followed by others. Detering international shipping from using the Red Sea route is likely to provoke global ramifications, the extent of which will be determined by how many shipping companies are put off and for how long.

It  is  estimated  that  approximately  12 percent of global trade passes through the Red Sea, including 30 percent of all global container traffic. A sustained cessation in the use of the Red Sea transit route is likely to cause major disruption to international trade and could affect almost everything, from the availability of electrical goods manufactured in Asia, to the price of oil and gas which has already spiked. In addition, shipping insurance premiums have almost doubled for some shipping companies and will almost certainly continue to increase.

RAMIFICATIONS FOR GLOBAL SUPPLY CHAINS AND THE CONSUMER 

The elevated threat level in the Red Sea will force many shipping companies into taking the longer route around Africa’s Cape of Good Hope. Shipping companies will be further deterred by the responses of insurers. Insurance companies will likely reevaluate the terms and conditions outlined in their insurance policies and potentially demand additional insurance policies such as war time insurance and kidnap and ransom insurance, with additional costs ultimately impacting the consumer. These decisions will likely embolden the Houthis who will almost certainly maintain a similar intensity of attacks due to the strategic effect it is already having. This will inevitably lead to delays and higher operating costs for shipping companies, ones that will almost certainly be absorbed by the consumer.

A transit from Asia to Europe could take up to two weeks longer and incur much higher fuel costs, with the alternative route adding approximately 3,500 nautical miles to the journey. Moreover, to decrease delays and associated shortages, ships may sail at an increased speed, only to consume even more fuel. The disruption will likely be complemented by the current limitations imposed on one of the world’s other major chokepoints, the Panama Canal, which is operating at 50 percent capacity due to a drought brought on by the effects of El Niño.

Any major disruption to the Red Sea route will add further strain on to a global economy still recovering from the effects of the COVID-19 pandemic and Russia’s invasion of Ukraine. The impact will be felt most by energy-importing countries, especially low-income countries, and Europe, with several countries already on the brink of a recession. Rising oil and gas prices are likely to contribute to elevated levels of headline inflation which could have several knock-on effects, most notably the efforts of central banks to lower inflation. In a worst-case scenario, a protracted suspension of the Red Sea route could contribute significantly to headline inflation, forcing central banks to reevaluate the lowering of interest rates and even prompt rate hikes. Central banks increasing interest rates can negatively impact ordinary people and businesses by raising borrowing costs, increasing mortgage payments, reducing consumer spending, potentially lowering home affordability, and influencing job market dynamics and investment returns.

POTENTIAL COUNTERMEASURES AND FORECAST 

The United States is set to initiate a maritime protection force named “Operation Prosperity Guardian,” involving several Western and Arab nations, deployed to safeguard shipping in the Red Sea and uphold the principle of freedom of navigation. A dedicated maritime task force could persuade shipping companies to resume using the Red Sea route. However, ensuring complete protection from missile attacks or other aerial threats will remain incredibly challenging and could lead to shipping companies granting transits on a ship-by-ship basis. It is unlikely that the taskforce will be large enough to cover the entire area that could be targeted by Houthi long- range weapon systems, especially if attacks are layered and conducted near simultaneously.

Directly targeting missile launch sites in Yemen will invariably degrade the Houthis’ ability to conduct ASCM attacks. However, such a policy comes fraught with potential dangers. Directly targeting the Houthis could result in civilian casualties, deepen existing divisions and provoke Iran and its network of proxy groups to escalate the conflict in other parts of the region.

Merchant vessels typically rely on X-band and S-band radars, automatic radar plotting aid (ARPA), automatic identification systems (AIS), and electronic chart display and information systems (ECDIS) for situation awareness, primarily designed to identify surface threats and enhance navigation,  offering limited capability against aerial threats. In addition, traditional threats posed by piracy or militant groups at sea have traditionally involved pirates or hijackers targeting vessels from small boats from the waterline when alongside.  The vast majority of countermeasures are designed to thwart threats from below the vessel’s freeboard, such as razor wire, high-pressure water cannons, and overhanging obstacles – all of which are ineffective against aerial threats. The increasing use of drones and missiles by groups like the Houthis may necessitate a comprehensive reassessment of security protocols and procedures and significant investments by shipping companies in countermeasures

such as surface-to-air radars, acoustic sensors, and counter-UAS systems. However, even with these systems, the protection afforded to merchant shipping will be limited and still require military escorts with their far more advanced intelligence, surveillance and reconnaissance (ISR) assets, early warning systems, surface-to-air missiles (SAMs), close-in weapon systems (CIWS) and emerging technologies like directed energy weapons (DEWs).

With the Houthis emboldened, merchant shipping unable to counter aerial threats and naval escorts likely only offering limited deterrence or coverage, it is highly likely that attacks within the Red Sea, Gulf of Aden and Bab-al-Mandeb will continue whilst Israel wages war against Hamas in the Gaza Strip. With the West Bank unsettled, the prospect of a northern front with Hezbollah looming and Iranian backed militias targeting US forces in Iraq and Syria, there is a genuine prospect of further escalation. In the case of escalation, it is likely that Iran will increase the facilitation of lethal aid into Yemen in order to sustain Houthi operations as it is almost certain that the tactical actions of the Houthis are delivering strategic effect which is beneficial to Tehran and will likely begin to influence the decisions of major Western powers.