Red Sea Shipping Crisis: An Egyptian Perspective
On the 7th of October 2023, Hamas, the Palestinian faction that is responsible for the administration of Gaza, launched an attack against Israel, initiating an operation codenamed “Al-Aqsa Flood”. [Al-Aqsa is Arabic for the third holiest mosque in Islam or the 'farthest mosque', to which the Prophet Mohammed (pbuh) made a miraculous night journey from Mecca to Jerusalem or Al-Quds].
As of drafting this article on the 17th of December, over 70 days later, the war is on-going. But it has expanded from the confines of the land of Palestine to other theaters in the world, most notably the Red Sea and Yemen.
Since the 2010s, there has been a civil war in Yemen between the Shia-faction of the Houthis and the Sunni-led Arab government that was later supported by a Saudi-led coalition, leading to one of the most messy, and horrible humanitarian crises to be inflicted upon any nation in the 21st century. Today there is still no unified government or a solidified peace treaty to end the war in Yemen, although the tempo of the conflict has decreased substantially since 2020.
The Houthis in Yemen have been threatening to attack shipping vessels that cross through the Bab-el-Mandab strait, unless the U.S. and its allies make Israel suspend its military operations and allow widespread humanitarian relief to the suffering Palestinian civilians of Gaza. The Houthis carried out their threat on the 19th of November, by hijacking the Galaxy Leader vessel, where it was then redirected to the Yemeni port of Hodeida, where the ship has now become a tourist attraction. The Yemenis claim that they are treating the multinational vessel’s crew well and that the Galaxy Leader fits the criteria to be attacked by them – that it is owned/linked by an Israeli firm. At least on the surface, the Houthis’ threats only apply to the ships that fit the following criteria:
1) Operated by an Israeli-owned or Israeli managed shipping company
2) An internationally flagged vessel heading to an Israeli port such as Eilat on the Red Sea or Ashdod on the Mediterranean, after passing through Egypt’s Suez Canal
On the 24th of November, a Malta-flagged vessel was damaged by a drone, while on the 25th a vessel was hijacked, followed by an attempted hijacking on the 26th that was foiled by the multinational anti-piracy coalition CTF 151. Following a period of relative calm, things flared up in December yet again.
On the 12th of December, a Norwegian vessel was struck by a ballistic missile. This was the first time a ship underway at sea had been struck by a ballistic missile (a Russian landing vessel was reportedly sunk in the port of Berdyansk by a Ukrainian Tochka ballistic missile during the opening weeks of the Russian-Ukrainian War in 2022). Contrary to the criteria placed by the Houthis, an Israeli company did not manage this vessel, and it was not heading to Israel, it was bound for Italy. Other incidents followed on the 13th by an attempted hijacking which failed, and three vessels being targeted on the 14th and 15th of December.
Several of the world’s largest shipping companies, including CMA CGM, Maersk, Hapag-Lloyd and OOCL, have stated that they have temporarily or indefinitely suspended any travel through the Red Sea--and thus, the Suez Canal. Over 55 vessels have been redirected away from the Suez Canal since the the 19th of November, according to the Suez Canal Authority. A decrease has been noted by the SCA between ships arriving in October when the conflict began, and November, when the conflict was well underway. The SCA has observed a decrease of 81 ships transiting the Suez Canal and $25 million in lost revenue. Prior to the last few days, this had not severely affected the Egyptian economy or Suez traffic, as it represented only a 3% decrease in terms of revenue. However, the losses recorded for the full month of December will undoubtedly be more severe than the losses recorded in November.
If this trend continues in the first quarter of 2024, as the war in Gaza drags on, it will be quite negative for Suez Canal revenue. Even with natural gas exports and tourism developed over the preceding 20 years, the Suez remains one of the vital arteries of the Egyptian economy. It is one of the few ways the Egyptian state has to earn US dollars and other hard currencies–-over 10 billion dollars’ worth last year.
Over the next several years the Egyptian government intends to invest in the industrial zones of the Suez Canal, with Russia and China as major partners. The opportunity to invest in these Special Economic Zones (SEZs) as well as real estate across the tourist sector are major attractions of Egypt’s residency and passport through investment programs. But the risks posed by further Houthi interdictions of Red Sea trade and an overall deterioration in the region--including Israeli politicians threatening to ethnically cleanse the Palestinian population from Gaza and drive 100s of thousands of Palestinian refugees into Egypt--could pose severe consequences for the Suez Canal zone and the whole Middle East.
The Suez Canal Authority has stated that it is monitoring the situation. Even though Egypt is a part of the CTF 151 anti-piracy coalition, it has been conspicuous by its absence along with other Arab states from the multinational coalition of the willing the U.S. has declared for Operation Prosperity Guardian. Only the GCC member nation of Bahrain, which is host to the US Navy’s 5th Fleet, has joined the public coalition. The Houthis responded by calling for Bahrain’s population Sunni and Shia to overthrow the Bahraini monarchy.
What is known about this U.S.-led operation is the following:
The operation aims to secure three million square kilometers of sea. Thus, it will involve US Navy and allied operations across the Red Sea, the Gulf of Aden, the Arabian Sea, and the northern Indian Ocean.
The Biden Administration stated that it intends to involve 40 nations in this coalition, but thus far only 11 nations including the tiny Seychelles in the Indian Ocean have signed on. Faraway Australia despite its commercial maritime interest in Indian Ocean to Mediterranean trade has declined as of this writing to send a warship.
The express intent of the operation is to protect the shipping lanes--it is unknown if it will escalate into open conflict with the Houthis. The Washington Examiner and other American media are reporting that U.S. air assets are moving into the region and being prepared to strike Houthi targets. Years of Saudi air strikes it should be noted did little to reduce Houthi missile and drone attacks on the Kingdom and many Houthis SCUDs luckily missed their targets due to inaccuracy rather than being intercepted by American-built and Saudi-operated Patriot missile batteries.
The Middle East is ending 2023 on a sorry note. Despite the rapprochement between Saudi Arabia and Turkey with Iran, regional instability persists. As this article went to publication on the ExitStrategy.World Patreon website, the Arab Republic of Egypt, Russia, China and India were seeing to the security of their own shipping in the straits. And even U.S. European allies such as France were rejecting American command insisting that it be a NATO operation.