The Houthi Reaction to the Gaza Conflict Could Threaten the Global Economy

Since the beginning of December, the geopolitical landscape has been rattled by the Houthi rebels in Yemen, who have escalated their attacks on Israeli-linked commercial vessels in the critical Bab el Mandab strait. This strategic waterway, connecting the Red Sea to the Gulf of Aden, is vital for global trade, with oil and natural gas shipments passing through on their way from the Middle East to Europe and North America. The Houthis asserted their involvement in two recent attacks in the area, in addition to a prior incident where they commandeered a Japanese-operated cargo ship using a helicopter last month.
The Iran-backed outfIt has not only targeted ships but has also demonstrated its capability by launching ballistic missiles and drones towards Israel. Yahya Saree, the Houthi military spokesperson, reiterated on December 12 that any vessels associated with Israel navigating along the Yemeni coast would be considered fair targets unless Israel discontinues its attacks on Gaza.
The Houthi movement, also known as Ansar Allah, emerged in the 1980s as a political-religious revivalist movement from the Zaydi sect in Yemen’s northern highlands. Over the years, they have gained control over most of Yemen’s north, including the capital, Sana’a, and have engaged in conflicts with various Yemeni governments, contributing to the collapse of the government led by Ali Abdullah Saleh in 2011.
Following the Arab Spring and the chaos in Yemen, the Houthis seized power in 2014, leading to a Saudi- and Emirati-led coalition intervention. Despite attempts to crush the insurgency, the Houthis, with Iranian support, held onto power, leading to a ceasefire in 2022. Now, with peace talks underway, the Houthis find themselves in a hard-earned phase of relative stability and significantly favourable power balance, making their ardent involvement in the Israel-Hamas conflict intriguing.
Why is the faction willing to risk hard-won gains and regional stability over a conflict thousands of kilometers away? The answer lies in the Houthi pursuit of a broader regional influence and the desire to play a role beyond Yemen’s borders. Their actions are not only symbolic but also strategic, aiming to reshape perceptions of the Houthi movement and bolster their standing in the international arena.
The Houthis belong to the so-called ‘axis of resistance,’ a coalition of proxy militant and insurgent factions that Iran has established in various regions, such as Yemen, Lebanon, Iraq, and Syria. Israel has sought to link Iran to Red Sea attacks by invoking this broader strategic framework, although Tehran refutes these allegations. The Houthi attacks on Israeli-affiliated vessels are not mere extensions of Iran’s geopolitical maneuvers; they are part of a carefully crafted political strategy. By aligning themselves with the Palestinian cause, the Houthis aim to garner domestic and regional support, reinforcing their legitimacy as Yemen’s governing authority. This move capitalizes on the enduring support for the Palestinians in the Arab world, presenting an opportunity for the Houthis to position themselves as champions of a shared cause.
Yemen’s strategic position on the Bab el Mandab Strait has long made it a focal point in regional geopolitics. Serving as a crucial passage for vessels traveling between Europe and Asia via the Suez Canal, the 30-kilometer-wide strait plays a pivotal role in global trade and energy security. With a history of conflicts, such as Egypt’s blockade in 1973, the key maritime chokepoint has been a geopolitical hotspot since the mid-20th-century. The Houthis recognize its significance, and their attacks on vessels, while currently perceived as a nuisance, could potentially escalate into more significant challenges for Israel and its allies.
The Bab el Mandab strait’s significance cannot be overstated in this context. This narrow passage is a linchpin of global trade, connecting Europe to Asia via the Suez Canal. Any disruption in this vital maritime route would have serious economic consequences globally. Houthi attacks not only pose a direct threat to Israeli-affiliated vessels but also trigger hikes in maritime insurance prices, danger compensation paid to crew, and restrictions on high-risk shipping, impacting global economic stability.
Following recent missile attacks on commercial ships, Washington is reportedly assembling a coalition of 12 nations to counter the Houthi threat in shipping. Warships from the US, France, the United Kingdom, and Israel are currently active in the Red Sea, having successfully thwarted attacks. With a coalition, the number of warships could increase, enabling strikes on targets within Yemen. Despite ongoing attacks, the Houthis aim to deter the coalition, warning Saudi Arabia and the UAE of targeting their oil infrastructure if they join. Such an escalation could have global consequences, impacting oil prices and international tanker insurance rates. The potential for conflict escalation through attacks on neutral ships would be of self-fueling nature amid a situation marked by suffering and destruction that has failed to prompt global action.
For Israel, the prospect of diverting shipments around the southern tip of Africa, instead of through the Red Sea, presents economic challenges, increasing shipping costs and transit times. Interference with the vital trade route carries substantial worldwide economic consequences as well. In light of recent events, international maritime insurance firms have begun escalating their premiums and imposing constraints on high-risk shipping coverage due to the direct impact of Houthi assaults. These trends are likely to sustain. This disruption contributes significantly to heightening broader tensions in the region, potentially prompting a shift in the risk analyses of the United States and Israel compelling them to take a more measured approach in their respective actions in the region. The Houthi threat, therefore, extends beyond immediate security concerns, influencing broader regional dynamics. As maritime tensions rise, the specter of a wider conflict looms, urging caution in the face of uncertainty.
The Houthi rebels, battle-hardened and dispersed, operate with low-cost, high-return provocations. Their attacks, difficult for Israel and its allies to counter effectively, serve as a constant reminder of the fragility of the regional balance. As long as the Gaza conflict persists, the Houthis are likely to exploit the situation, seeking new ways to create disruption and amplify risks in the region.
The Houthi challenge thus transcends local grievances and regional conflicts. It underscores the intricate web of geopolitics and global shipping, where a relatively small insurgent group can disrupt major trade routes and influence international dynamics. Although the Gaza conflict’s geographical specificity and limited economic spillover shield citizens of neutral countries from direct costs, the Houthis’ activities in the Red Sea that have aggravated in response to it, have the potential to trigger a surge in prices. Initially impacting oil prices, the ripple effect could extend to various other commodities, significantly affecting global markets. As the world grapples with the complex interplay of interests in the Middle East, the Houthi actions serve as a stark reminder that seemingly isolated conflicts can have far-reaching implications for the interconnected global order. Success of such activities would also embolden the willingness of Houthis and related groups to expand the scope of their operations and push the boundaries of their disruptive interventions. The international community faces the task of navigating these crossroads wisely to prevent a further escalation that could reverberate beyond the waters of the Bab el Mandab, justifying its name as ‘The Gate of Grief’.
Source: Article written by Pitamber Kaushik, writer, journalist, columnist, and independent researcher whose articles have appeared in over 300 publications across 70+ countries.