Can the US-led maritime force stop Yemen’s Houthi attacks during Gaza war?

The Houthis say they won’t stop attacking ships unless Israel stops its attacks on Gaza. So far, the shipping industry doesn’t appear convinced the task force can halt them.

AJ By Maziar Motamedi 19 Dec 2023

The United States has announced the establishment of a new multinational maritime security force in response to attacks on ships launched by Iran-aligned Houthi rebels in Yemen.

The initiative is aimed at ensuring ships can pass through busy waterways near Yemen safely as the Houthis have been targeting vessels in protest of Israel’s war on Gaza, which has killed more than 19,000 Palestinians.

But what will the task force do, how will it work and how effective could it be?

What is the new force?

US Defense Secretary Lloyd Austin announced the establishment of a 10-country force on Tuesday in Bahrain.

In addition to the Arab nation, the United Kingdom, Canada, France, Italy, the Netherlands, Norway, the Seychelles and Spain have agreed to join Washington in the new mission.

Some of the countries are expected to conduct joint patrols in the southern parts of the Red Sea, the Bab al-Mandeb Strait and the Gulf of Aden while others will support the force by providing intelligence.

The mission will be coordinated by Combined Task Force 153 (CTF 153), an existing force under a US-led joint effort established in April 2022 with the aim of improving maritime security in the area.

The existing framework has 39 member nations, and there are reports that other countries could join or have already agreed to join the newly formed 10-member maritime effort but don’t want it publicised.

The Houthis have promised to stand up to any US-led efforts and only stop their attacks once Israel stops its war in Gaza. They have signalled they are open to talks, but diplomacy has so far failed to stop their attacks.

For its part, Iran has warned Washington that its joint maritime effort will face “extraordinary problems”.

How disruptive are the Houthi attacks?

The Houthi group, also known as Ansarallah, started its operations against Israel by launching missiles and drones on the southern parts of Israel, including the port and tourist city of Eilat, in October soon after the war started.

Most of the projectiles were intercepted by Israeli and US defences or fell short due to the roughly 2,000km (1,240-mile) distance between the two countries.

So the Houthis changed tactics, instead focusing on ships near their shores. They have been firing missiles and launching attack drones at commercial ships that they claim are linked to Israel and seized a vessel last month that they are still holding in a Yemeni port.

Their attacks have stopped many ships from making their way to Israel.

“The Houthis are feeling emboldened. They perceive that they have won the civil war in Yemen and that their position is unchallenged domestically,” said Thomas Juneau, an assistant professor at the Graduate School of Public and International Affairs at the University of Ottawa whose research focuses on the Middle East, especially Iran and Yemen. “They also probably assess that the US and its regional partners are keen to avoid an escalation of the war in Gaza into a full-blown regional war.”

At least 12 shipping companies have suspended transit through the Red Sea due to the Houthi attacks. They include some of the largest in the world: Denmark’s AP Moller-Maersk, Germany’s Hapag-Lloyd, the Italian-Swiss Mediterranean Shipping Company and France’s CMA CGM.

Is a new oil crisis brewing?

Markets, including the oil and gas market, have increasingly reacted to the attacks, especially considering the volume of cargo being redirected. For instance, Maersk and Hapag-Lloyd together operate almost a quarter of the world’s shipping fleet.

Bab al-Mandeb, the narrow waterway that separates Eritrea and Djibouti on the Horn of Africa from Yemen on the Arabian Peninsula, is where 10 percent of the world’s seaborne crude oil travels. More than 17,000 ships pass through it each year. It is less than 20km (12 miles) wide, far narrower than the more than 200km (124 miles) of the northern parts of the Red Sea.

The direct impact on oil prices has been relatively limited so far, but experts have warned that things could significantly escalate if the attacks continue and security remains an issue. Insurance premiums and prices of oil and gas products are expected to rise if the conflict is not resolved.

“The Houthis will not be deterred to stop these strikes easily,” Juneau told Al Jazeera.

How will the task force provide protection to ships?

Some of the member nations of the task force have warships in the Red Sea. Two US navy destroyers, the USS Carney and USS Mason, are sailing through the Bab al-Mandeb Strait.

The idea is for the warships to serve as a deterrent to Houthi attacks and to stop them when possible.

The naval ships won’t necessarily escort commercial vessels through the Red Sea but will be on standby to respond to attacks.

Will the task force be able to stop Houthi attacks?

It’s complicated. Houthi fighters landed a helicopter on a ship last month to capture it. The presence of task force military vessels nearby could make a repeat of such a move harder.

The task force’s warships could also strike down incoming missiles from Yemen, just as they have intercepted rockets headed towards Israel. But even Israel’s much-touted Iron Dome missile defence system doesn’t have a 100 percent track record of stopping incoming rockets. So far, the US has not fired back at Yemen.

“It will be difficult for the recently announced, US-led coalition to fully deter the Houthis and put an end to their disruption of maritime shipping,” Juneau said.

At this point, the markets appear unconvinced that the task force will be able to protect shipments through the Red Sea. On Tuesday, Maersk said it was rerouting its ships around Africa to avoid sending them through the Bab al-Mandeb Strait.

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US-led force to patrol Red Sea in response to attacks by Houthis backing Palestinians

Video

* US Defense Secretary Austin on Houthi attacks: "This is an international challenge that demands collective action."

* US-led force includes UK, France, Canada and others.

CAIRO/GAZA/JERUSALEM, Dec18, 2023 (Reuters) By Nidal Al-Mughrabi, Bassam Masoud and James Mackenzie

Several countries have agreed to jointly carry out patrols in the southern Red Sea and Gulf of Aden to try to safeguard commercial shipping against attacks by Yemen's Houthi rebels, U.S. Defense Secretary Lloyd Austin said.

The Iran-aligned group says the aim of its missile and drone attacks is to support the Palestinians as Israel and Hamas wage war in the Gaza Strip. On Monday, Mohammed al-Bukhaiti, a member of the Houthi politburo, told Al Jazeera that his group will be able to confront any coalition formed by the United States that could deploy to the Red Sea.

Austin, who is on a trip to Bahrain, home to the U.S. Navy's headquarters in the Middle East, said participating countries led by the United States include the United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain.

"This is an international challenge that demands collective action. Therefore today I am announcing the establishment of Operation Prosperity Guardian, an important new multinational security initiative," Austin said in a statement early on Tuesday.

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Shipping firms avoid Red Sea as Houthi attacks increase

Shipping Companies

Shipping firms avoid Red Sea as Houthi attacks increase

Reuters December 19, 2023

Iranian-backed Houthi militants in Yemen have stepped up attacks on vessels in the Red Sea to show their support for Palestinian Islamist group Hamas fighting Israel in Gaza.

The attacks, targeting a route that allows East-West trade, especially of oil, to use the Suez Canal to save the time and expense of circumnavigating Africa, have pushed some shipping companies to reroute vessels.

Below are companies (in alphabetical order) that have decided to pause shipping via the Red Sea:

CMA CGM

French shipping group CMA CGM said on Dec. 18 it was rerouting some vessels via the Cape of Good Hope, and had instructed all its other container ships that were scheduled to pass through the Red Sea to reach safe areas and pause their journey until further notice.

EURONAV (EUAV.BR)

Belgian oil tanker firm Euronav said on Dec. 18 it would avoid the Red Sea area until further notice.

EVERGREEN (2603.TW)

Taiwanese container shipping line Evergreen said on Dec. 18 its vessels on regional services to Red Sea ports would sail to safe waters nearby and wait for further notification, while ships scheduled to pass through the Red Sea would be rerouted around the Cape of Good Hope. It also temporarily stopped accepting Israeli cargo.

FRONTLINE (FRO.OL)

Norway-based oil tanker group Frontline said on Dec. 18 that its vessels would avoid passages through the Red Sea and the Gulf of Aden, boosting the rates customers must pay for crude transport.

HAPAG-LLOYD (HLAG.DE)

German container shipping line Hapag Lloyd said on Dec. 18 it would reroute several ships via the Cape of Good Hope until the safety of passage through the Suez Canal and the Red Sea could be guaranteed.

A projectile believed to be a drone struck its vessel Al Jasrah on Dec. 15, while sailing close to the coast of Yemen. No crew were injured.

HMM (011200.KS)

South Korean container shipper HMM said on Dec. 19 it had from Dec. 15 ordered its ships from Europe that would normally use the Suez Canal to reroute via the Cape of Good Hope for an indefinite period of time.

MAERSK (MAERSKb.CO)

Denmark's A.P. Moller-Maersk on Dec. 15 said it would pause all container shipments through the Red Sea until further notice, following a "near-miss incident" involving its vessel Maersk Gibraltar a day earlier.

On Dec. 19, Maersk said vessels that were due to sail through the Red Sea and the Gulf of Aden would be re-routed around the Cape of Good Hope.

MSC

Mediterranean Shipping Company (MSC) said on Dec. 16 its ships would not transit through the Suez Canal, with some already rerouted via the Cape of Good Hope, a day after Houthi forces fired two ballistic missiles at its MSC Palatium III vessel.

OCEAN NETWORK EXPRESS

Ocean Network Express (ONE), a joint venture of Japan's Mitsui O.S.K. Lines (9104.T), Nippon Yusen (9101.T) and Kawasaki Kisen Kaisha (9107.T), said on Dec. 19 it had decided to re-route vessels away from the Suez Canal and the Red Sea. Instead, ONE will navigate its ships around the Cape of Good Hope or temporarily pause their journey and reposition them in safe areas.

OOCL

Orient Overseas Container Line (OOCL) stopped cargo acceptance to and from Israel until further notice, the shipping company owned by Hong Kong-based Oriental Overseas (International) Ltd (0316.HK) said on Dec. 16.

WALLENIUS WILHELMSEN (WAWI.OL)

Norway's Wallenius Wilhelmsen said on Dec. 19 it would halt Red Sea transits until further notice. It said re-routing vessels via the Cape of Good Hope would add one to two weeks to voyage durations.

YANG MING MARINE TRANSPORT (2609.TW)

Taiwan's Yang Ming Marine Transport said on Dec. 18 it would divert ships sailing through the Red Sea and the Gulf of Aden via the Cape of Good Hope for the next two weeks.

Compiled by Paolo Laudani, Izabela Niemiec and Jesus Calero in Gdansk; editing by Stephen Coates and Milla Nissi

Our Standards: The Thomson Reuters Trust Principles.

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BP Pauses Oil Shipments Through Red Sea Amid Fears of Attacks

 

Cargo ships waiting in the Red Sea near the opening of the Suez Canal, in 2021.Credit...
Sima Diab for The New York Times

NYT  By Stanley Reed Dec. 18, 2023

Global oil prices jumped on Monday after the energy giant BP said it had stopped sending tankers through the Red Sea, a vital shipping lane which has become an increasingly dangerous route because of drone and missile attacks targeting merchant ships launched by the Houthi armed group in Yemen.

The announcement by BP raised fears of further disruption to shipments through the Suez Canal, a major conduit for both crude and refined oil products.

In response to the growing concerns of disruption, Defense Secretary Lloyd J. Austin III announced on Monday night that at least nine other nations had agreed to join the United States in a joint security operation in the Red Sea, where some of those countries’ navies have already foiled drone attacks by the Houthis, who control much of northern Yemen.

The recent escalation of attacks “threatens the free flow of commerce, endangers innocent mariners, and violates international law,” Mr. Austin said in a statement. The nations joining the operation include Britain, France, Canada, Italy, Norway and Spain, he said.

The Houthis have been staging assaults against ships in the region since the Oct. 7 Hamas-led attacks on Israel. They have threatened all vessels owned and operated by Israel, as well as any ship heading for Israeli ports. Both the Houthis and Hamas, which controls Gaza, are backed by Iran.

“BP has decided to temporarily pause all transits through the Red Sea,” BP said in a statement on Monday that referred to “the deteriorating security situation for shipping.”

Over the weekend, military forces of the United States and other countries said they had shot down more than a dozen drones in the area. On Monday in Tel Aviv, before the task force announcement, Mr. Austin warned that “Iran’s support for Houthi attacks on commercial vessels must stop.”

Soon after Mr. Austin’s remarks, Mohammed Ali al-Houthi, a senior member of the Houthis, defended the attacks on social media as an effort to force Israel to halt its military assault on Gaza. The United States has “no right to speak about international law, which your airstrikes and rockets have torn up and buried under the ruins of Gaza and Yemen,” Mr. al-Houthi said.

Brent crude, the international oil benchmark, rose more than 2 percent in trading on Monday, approaching $80 a barrel. Oil prices had been under downward pressure because of higher production, especially from the United States, and signs that broad economic weakness would restrain demand. Last month, the producers group known as OPEC Plus, announced output cuts to steady the market, but there was little response in global oil markets until recently.

Shortly after the Oct. 7 attacks, Chevron halted production at a natural gas platform in Israeli waters offshore from the Gaza Strip but was able to restart it a few weeks later. Disruption to shipping through the Suez Canal could have more of an impact on the global economy.

As the Red Sea has become a flashpoint, major shipping companies — including Evergreen, Hapag-Lloyd, Maersk and Mediterranean Shipping — have in recent days said they would temporarily stop sending vessels through the area.

A key risk is that if the attacks on shipping persist, oil companies and other shippers may stop using the Suez Canal for an extended period. Such a change could disrupt the flow of oil from countries like Saudi Arabia and Iraq, where BP operates a major oil field, to Europe and elsewhere.

Tankers on their way from the Persian Gulf region regularly travel through the Red Sea to reach the Suez Canal, which serves as a conduit to the Mediterranean Sea. Ships from Saudi Arabia also unload crude into a pipeline called the SUMED that runs from Ain Sokhna, a port and storage area south of Suez, to a terminal near the Egyptian city of Alexandria.

Viktor Katona, an analyst at Kpler, a firm which tracks commodity shipping, said that the volume of oil and oil products flowing through the Suez Canal had already dropped sharply this month, to about one-third of the usual flows. About 12 percent of crude oil and refined products traded by sea typically travel through the canal, Mr. Katona estimated.

If a slowdown continues, he said, tankers will need to take the far longer route around the Cape of Good Hope in Africa. In that case, not only would tankers burn more fuel in transit but freight rates and insurance premiums would most likely rise, increasing costs for consumers.

“It’s a pressure piling up in the system,” he said.

Vivian Nereim contributed reporting.

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Where Is The Promised Safety Net For The Poor?

 

Where Is The Promised Safety Net For The Poor?

19 December 2023 Daily Mirror lk

The country is totally relying on the International Monetary Fund (IMF) led programme for recovery from the unprecedented economic crisis that was created by the leaders who for the past several decades promised to the people a paradise on earth. Despite the successful recovery being still in the balance, the economic reforms that are being implemented under the IMF programme have already started to bite especially the poor and the vulnerable.

Those who paid between Rs. 1,000 and Rs. 1,500 monthly for their electricity usage in the early months of last year are now paying an amount between Rs. 6,000 and Rs. 7,000 under the cost recovery pricing formula of the IMF, while the water tariff levied from most of the poor people has risen from about Rs. 600 to Rs. 3,000. Power, water and fuel prices have affected the prices of all other commodities and services, hiking them at least by threefold whereas the income of a majority of the population has been static or dropped drastically during the period, besides the real value of money also having dropped significantly. 

The Value Added Tax (VAT) Amendment Bill which is meant for the increase of tax and the removal of tax exemptions for certain items was passed a few days ago and is expected to have a huge impact on the prices of many essential goods and services. It is expected to affect the electricity tariff and fuel prices as well and would have a spiraling negative effect on the lives of the people, especially the poor. They are destined to further suffer for no fault of their own, but due to the economic mismanagement by those who were elected by them to rule the country. 

From the beginning, the IMF reiterated this situation calling it “brutal” while proposing the need to have what it called a social safety net to protect the poor and the vulnerable from the effects of the reforms that are being implemented under its programme. One can observe this in the statement made by the IMF staff members soon after they inked the initial agreement with the Sri Lankan officials on the programme on September 1 last year. They underscored the need for a protective mechanism for the low income groups in the country who they knew would bear the brunt of the economic reforms on the way to recovery. They say that the objectives of the IMF-supported programme will continue to focus on restoring macroeconomic stability and debt sustainability, while protecting the poor and vulnerable, among others. 

In spite of the IMF officials and the Sri Lankan leaders often offering assurances on the so-called social safety net for the poor and vulnerable, the situation on the ground is a far cry from what the affected communities expected. The only concession that was in place for the people most affected by the economic crisis as well as the reforms under the IMF programme was a cash dole-out for a freshly selected group of people which is also meagre to offset the effects of the crisis and the remedy for it – the reform programme. 

During a press briefing in September on the first review of the progress of the IMF programme in the country, the IMF officials were questioned about the poor by journalists, and Sarwat Jahan, IMF Resident Representative in Colombo said “We can help through multiple ways. First is when there is stabilization in the economy that means that it’s good for all Sri Lankans, including the poor and the vulnerable, because this means that inflation will go down” Isn’t it a long wait for the most affected group of people, since the IMF officials themselves are concerned that “full economic recovery is not yet assured.”

The programme does not seem to realize the grave situation the poorest of the poor have faced with. Both the government and the IMF are concerned about the revenue targets, no matter what happens to whom. Neither party seems to have put more weight on tax evasion especially by big sharks, despite it being under discussion, from the beginning.   

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Economy signals rebound

FT Monday, 18 December 2023 

Agricultural sector up 3%; Industrial by 0.3% and Services by 1.3%

GDP in July-Sept. quarter improves by 1.6% ending six quarters of negative growth

Sri Lanka’s economy has shown signs of rebound with the July-September posting a 1.6% improvement ending six quarters of negative growth.

As per provisional data released by the Department of Census and Statistics (DCS) the year-on-year GDP growth rate for the third quarter of 2023 is estimated at 1.6% of positive growth rate.

The Agricultural, Industrial and Services activities expanded by 3%, 0.3% and 1.3% respectively in the third quarter of 2023, DCS said.

The three major economic activities of the economy; ‘Agriculture’, ‘Industry’ and ‘Services’ contributed their share to the GDP at current prices by 7.8%, 28.1% and 57.5% respectively, while ‘Taxes less subsidies on products’ component has contributed 6.5% of share to the GDP in the third quarter of year 2023.

DCS said the third quarter of the year 2023 began with the favourable change in uncertainties in foreign exchange which were observed in previous quarters and the economy and its expectations about the future having been growing at a lower rate, was transformed into a positive state. 

The input costs declined parallel to the favourable change in exchange rate and the demand for debts which were at a lower level, showed a positive indication in this quarter along with the reduction in interest rate. With the expansion of the tourism sector, a positive impact could be observed in the service exports during this quarter. Accordingly, accommodation, food and beverage service activities have recorded a high positive growth while agricultural activities have also recorded a positive growth rate in the third quarter of 2023. Moreover, some of the manufacturing industries have also recorded expansions in this quarter.

Performance in Agricultural activities;

In the third quarter of the year 2023, the agriculture activities have recorded an expansion of 3% when compared to the 6.7% of negative growth recorded in the same quarter in the year 2022.

The expansion in the agricultural activities were mainly driven by ‘Growing of cereals’ (33.2%), ‘Marine fishing and marine aquaculture’ (27.5%), ‘Growing of rice’ (23.2%), ‘Agricultural supporting activities’ (20.9%), ‘Animal production’ (5.4%), ‘Growing of fruits’ (5.4%), ‘Growing of coffee, cocoa and other beverage crops’ (3.8%), ‘Growing of vegetables’ (3.2%) and ‘Growing of sugarcane’ (3.1%).

However, some agricultural economic activities such as ‘Plant propagation’ (36.8%), ‘Forestry and logging’ (30.7%), ‘Fresh water fishing and freshwater aquaculture’ (10.3%), ‘Growing of oleaginous fruits’ (6.1%), ‘Growing of other perennial crops’ (3.9%), ‘Growing of spices’ (3.6%), ‘Growing of rubber’ (2.8%), and ‘Growing of tea (1.4%) have recorded negative growth rates in this quarter.

Performance in Industrial Activities;

During the third quarter of year 2023, the overall industrial activities have reported an expansion of 0.3% compared to the 21.3% negative growth rate reported in the same quarter in the year 2022.

Among the ‘Industrial activities’, the ‘Construction’ activity has recorded a negative growth rate of 5.5% while ‘Mining and quarrying’ activity has expanded slightly by 0.7% during this quarter. The overall manufacturing industry has grown by 2.1% during this quarter. Some manufacturing activities have reported expansions in this quarter with respect to the same quarter of the year 2022 including ‘Manufacture of coke and refined petroleum products’(168.6%), ‘Manufacture of basic metal and fabricated metal products’ (29.9%), ‘Manufacture of furniture’ (28.7%), ‘Manufacture of other non-metallic mineral products’ (17.5%), ‘Manufacture of food, beverages and tobacco products’ (11.8%) and ‘Manufacture of chemical products and basic pharmaceutical products’ (4.2%).

However, manufacturing activities such as ‘Manufacture of wood and wood products’ (19.0%), ‘Other manufacturing and repair and installation of machinery and equipment’ (18.9%), ‘Manufacture of rubber and plastic products’ (16.5%), ‘Manufacture of textiles, wearing apparel, leather and other related products’ (10.1%), ‘Manufacture of machinery and equipment’ (11.4%) and ‘Manufacture of paper and paper products’ (1.5%) have recorded declines in this quarter compared to the third quarter of the year 2022.

The ‘Electricity, gas, steam and air conditioning supply’ and ‘Water collection, treatment and supply’ activities have recorded expansions by 4.2% and 11.9% respectively in this quarter.

Performance in Services Activities;

In the third quarter of the year 2023, the performance of the service sector has also expanded by 1.3% when compared to 4.2% shrinkage reported in the same quarter of year 2022.

According to the quarterly review of this quarter, ‘Financial service activities’ has reported 0.5% decline while ‘Insurance services’ have reported 29.6% positive growth. Further, ‘Accommodation, food and beverage serving activities’ (34.9%), ‘Programming and broadcasting activities’ (10.9%), ‘Transportation of goods and passengers including warehousing’ (5.7%), ‘Postal and courier services’ (3.3%), ‘Professional services’ (1.9%), ‘Educational services’ (1.8%), ‘Human health services’ (1.0%), ‘Wholesale and retail trade’ (0.9%) and ‘Other personal services’ (0.6%) have reported considerable positive growth rates during this quarter.

Moreover, activities such as ‘IT programming consultancy and related activities’ (20.1%), ‘Real estate activities and ownership of dwelling’ (5.7%) and ‘Telecommunication’ (2.6%) have reported negative growth rates during the third quarter of 2023.

DCS also said the Gross Domestic Product for Sri Lanka for the third quarter of the year 2023 at constant price (2015) has increased up to Rs. 2,946,107 million from Rs. 2,900,654 million which was recorded in the third quarter of the year 2022. In addition, the Gross Domestic Product for Sri Lanka for the third quarter of 2023 at current price has increased up to Rs. 6,906,891 million from Rs. 6,586,602 million which recorded in the same quarter in year 2022 registering 4.9% of positive change in the current price GDP.

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