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Global shipping on edge after Houthis seize Israeli vessels

On November 19, Yemeni Houthis seized a Japanese-operated cargo ship in the Red Sea, with armed men jumping onto its deck from a helicopter before hoisting Palestinian and Yemeni flags.

According to LSEG data, Galaxy Leader is owned by a company registered under Isle of Man-headquartered Ray Car Carriers, a unit of Tel Aviv-incorporated Ray Shipping, which belongs to Abraham Ungar, an Israeli businessperson.

The Marine Traffic tracking site said the empty car carrier left Korfez in Turkey and was on its way to Pipavav in India when it went offline southwest of Jeddah, Saudi Arabia. The vessel is currently moored in the port of Hodeida in Yemen.

The ship’s operator, Japan’s Nippon Yusen, said it had set up a taskforce to collect information on the 25-person crew, who are from the Philippines, Bulgaria, Ukraine, Romania and Mexico.

Though no Israelis were on board, Israel called the incident an “Iranian act of terrorism” and said it would have “grave consequences” for international maritime security.

Geopolitical tit-for-tat

In the months before the Israel-Hamas conflagration started on October 7, the number of hijackings had been increasing after a lull in the Persian Gulf, the Strait of Hormuz and the Gulf of Oman, mainly due to US-Iranian tensions and restrictions on the trade of Iranian oil.

“This is part of a tit-for-tat war between the US, UK and Iran, and could draw other countries in. Iran’s Revolutionary Guard Corps Navy want to influence the geopolitical scene and show they control the Straits of Hormuz,” Dimitris Maniatis, COO of private maritime security company Seagull Maritime, says.

In April and May, Iranian naval forces seized three internationally flagged oil tankers in response to US seizures of tankers allegedly carrying Iranian oil as part of sanctions enforcement operations.

In another incident on November 26, the US Navy reportedly captured five pirates who had attempted to hijack the Central Park, a tanker run by an Israeli businessman, in the Gulf of Aden near Somalia.

The International Maritime Bureau’s Piracy Reporting Center noted 115 incidents of global piracy and armed robbery attacks in 2022, less than the previous year.

Half of the 2022 attacks on ships took place in Southeast Asia, with the Straits of Singapore particularly vulnerable. Other areas of concern include South and Central America and the seas around Nigeria, Ghana and Angola.

And experts expect such incidents to continue.

“We expect to see this happening again. They showed they can do it, and they seek media attention. They have info on Israeli ships. They know what they are doing. Israeli-connected vessels will be targets. It’s very simple to track,” Maniatis says.

In fact, Houthi rebel leader, Abdul Malik al-Houthi, said the group was looking for Israeli vessels in the Red Sea — even those without Israeli flags.

Houthis not alone

“This is nothing new, it’s only big news because the Houthis did it,” Maniatis says. “From 2019 onward in the Hormuz Straits the same tactics were used by the Iranians. Houthis are a proxy for Teheran against Israel and others,” he adds.

Houthis control much of the western Yemen coast and overlook a large stretch of the Red Sea and the narrow Bab al-Mandab Strait, some of the world’s busiest waterways. Still, they need support.

“Houthis have not resorted to hijackings in recent years. In the Red Sea and the Gulf Aden, the main risk facing commercial vessels remains piracy, of an opportunistic, criminal nature,” says Harish Natarajan, head of economic analysis at AKE International, a security risk consultancy in London.

Small fry and big business

“The seizure of the Galaxy Leader was politically motivated. As such the threat to merchant shipping as a whole is low, and this is likely to remain the case due to the very specific nature of the targeting of these vessels,” John Stawpert of the International Chamber of Shipping tells DW.

Based on the recent case of the Heroic Idun, wich also belongs to Abraham Ungar, specialists said a payment of $1-1.5 million (€950,000-€1.35 million) might be the asking price for the ship’s safe return.

But predictions are a fool’s game, given that about a third of all daily shipping in the world passes the northeast corner of Africa, where the sea narrows to a point between Yemen and Djibouti on its way to the Suez Canal and the Red Sea.

Natarajan says the risk of attack is likely to mirror developments in Gaza, whereby an escalation of Israeli operations against the Palestinians would likely prompt an increase in the risk of attacks targeting Israeli ships and perhaps extending to US and Western assets.

Overall, the UN has estimated that piracy costs the global shipping trade up to $12 billion a year. About 10% of global seaborne petroleum trade goes through the Gulf of Aden, the waterway between Yemen and the Horn of Africa, according to the US Energy Information Administration.

To date, insurers have not changed their practices, says Stawpert. “Similarly, the specific nature of the incident means that the overall threat to shipping is low, and it is therefore very unlikely to result in significant rerouting of vessels from the Red Sea.”

“The extreme case is that of the Black Sea. Following Russia’s invasion of Ukraine, the cost of insuring a vessel and its cargo rose up to 10% of its total value,” Natarajan says.

“We don’t expect any contraction of sea trade, just security, and thus costs, being increased,” Maniatis believes. “Most vessels, after all, have no Israeli connection.”
Source: Deutsche Welle

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