Cairo- The involvement of the Yemeni Houthi group in the ongoing war in the Gaza Strip, by targeting any ship passing through the Bab al-Mandab Strait heading to Israeli ports, has raised the concern of the international community about the future of global oil and energy trade on the one hand and the extent to which the Suez Canal will be affected on the other hand.
Since last October 19, the Houthis launched their first attacks against Israel with cruise missiles and drones, then took control of a commercial ship in the Red Sea, detained 25 of its members, and attacked a number of commercial ships.
Since then, the security of maritime navigation in the Bab al-Mandab Strait and the Gulf of Aden has received increasing international and regional attention, while a source in the Yemeni government told Al Jazeera that it had received an American invitation to participate in a military coalition to protect the Red Sea from Houthi operations, and that it had decided to participate in it.
The Houthis expanded the scope of their military operations, from targeting Israeli ships or those linked to them, to include all ships heading to them, if food and medicine do not enter the Gaza Strip, stressing that any ship heading to Israel becomes a legitimate target, as they put it.
The Houthi military spokesman, Yahya Saree, said yesterday, Thursday, that the group carried out a military operation with a drone against a container ship called “Maersk Gibraltar” that was heading to Israel, after its crew refused to respond to calls.
Bab al-Mandab had never been completely closed before, and Egypt used it in the October 1973 war to blockade Israel at sea from the south, when Egyptian naval forces closed the Bab al-Mandab strait to Israeli navigation for about 3 weeks.
Since the outbreak of the conflict in Yemen and the Houthi group’s control of the capital, Sana’a, in September 2014, its military operations have focused on targeting specific ships, and it has not resorted to closing the strait, whether partially or completely.
Navigational integration
Bab al-Mandab is a strait that connects the Red Sea to the Gulf of Aden and the Indian Ocean, separating Djibouti in Africa and Yemen in Asia, and is controlled by Yemen, Djibouti, and Eritrea.
The importance of this Bab al-Mandab Strait increased globally after the opening of the Suez Canal in 1869 and connecting the Red Sea to the Mediterranean Sea.
The security and safety of traffic through the Strait – through which about a fifth of global oil consumption passes – receives international attention, and countries such as America, Russia, China, Turkey, France and Israel have been keen to have military bases in the countries of Djibouti, Somalia and Eritrea.
On the other side is the Suez Canal, an artificial waterway linking the Mediterranean Sea and the Red Sea, shortening the maritime trade route between Europe and Asia without having to take a longer route around the African continent.
About 10% of oil trade and 8% of liquefied gas trade pass through the Suez Canal, including about two-thirds of crude oil coming from the Gulf region, according to data from the American Bloomberg agency.
About 30% of the world’s shipping containers pass daily through the Suez Canal – which is 193 kilometers long – and about 12% of the total global trade of all goods.
The share of goods coming from the south of the canal – crossing the Bab el-Mandeb Strait – amounts to about 47% of the volume of goods transiting the Suez Canal, according to statistics from the Suez Canal Authority.
In addition, about 98% of goods and ships coming from the south of the Suez Canal in Egypt pass through the Bab al-Mandab Strait in Yemen.
What are the potential losses?
Press reports in Bloomberg, the French newspaper Le Figaro and others warned that security developments in the Bab el-Mandab Strait will have impacts on shipping traffic through the Red Sea, and consequently the Egyptian Suez Canal, and this may cause a global economic recession.
What is the nature of the potential losses that the global economy may incur if the security situation develops in the vital and most crowded strait?
The incident of the grounding of the giant ship “Ever Given”, which is 400 meters long and 59 meters wide, in the Suez Canal in March 2021, and the disruption of navigation traffic in the Suez Canal in both directions for 6 days, provides figures close to the size of the potential losses.
- The week-long closure of the canal caused a loss to global trade amounting to about $10 billion per day.
- The Suez Canal Authority’s losses amounted to $14 million per day, and the number rose to $28 million per day and about $200 million per week.
Similar events may lead to:
- Double the prices of transportation, insurance, production costs and fuel.
- Increased global oil and gas prices, thus increasing global commodity prices.
What about the Suez Canal?
The Suez Canal is one of the main sources of foreign exchange, with expectations that it will reach $10.3 billion by the end of 2023.
Until the end of last November, ship traffic through the Suez Canal was not affected by developments in the Bab al-Mandab Strait, as its number increased to 2,264 ships from both directions, compared to 2,171 ships crossing during the same month last year, an increase of 4.3%, and canal revenues also grew. By 20.3%, according to the Suez Canal General Authority.
The total revenues of the Suez Canal increased by 34.7% in the fiscal year ending June 30, 2023, to $9.4 billion, compared to $7 billion in the previous fiscal year. The number of ships passing through the canal also increased by 17.6% to reach 26,000 ships, according to data from the Canal Authority. Suez.
The former director of the Egyptian Naval College, Rear Admiral Mahfouz Marzouk, says, “All events related to the region affect the Suez Canal, but they are not expected to affect the volume of ship traffic and the canal’s revenues, which are constantly increasing, due to the rise in shipping and traffic fees and the increase in the volume of global trade.” .
In his speech to Al Jazeera Net, Marzouk ruled out that the security situation in Bab al-Mandab would develop, because the philosophy of the countries concerned with the security and safety of the Strait is to protect and secure shipping lines, and not to attack the sources of the threat, stressing that the tensions in the past years did not affect the Suez Canal due to its limitations as stated at the time. .
Major General Marzouk pointed out that despite the ability of the countries participating in securing the Strait militarily to direct military strikes against the source of the threat, there are political restrictions that prevent them from engaging in military confrontations that ignite the region and lead to dire consequences.
In addition to the above, there is an urgent need for the Suez Canal now more than ever – according to Major General Marzouk – which requires dealing calmly and carefully, pointing out that the goods lines that exit from the east coast of the United States towards Asia and vice versa currently pass through the Suez Canal, due to climate restrictions in The Panama Canal and the drought there.
Regional and international repercussions
Energy and oil economics expert Dr. Nihad Ismail stated that the Suez Canal would be affected by the Houthi group’s operations, with the high pace of escalation and ships being forced to avoid the Bab al-Mandab Strait, the Red Sea, and the Suez Canal, and resort to the option of long and expensive trips around Africa.
Speaking to Al Jazeera Net, Ismail considered that the matter getting out of control in the south of the Red Sea would cost the Egyptian economy – which suffers from a scarcity of the dollar – great losses, noting that the international economy would also suffer from a trade recession.
Ismail saw that the position of the Houthi group – according to statements issued by their leaders – does not target the Suez Canal, but rather the ships heading to Israeli ports. He said, “Therefore, we do not expect an escalation so that the contract of the hidden conflict and proxy war is not broken.”
