Global Shipping Rattled After Houthis Seize Israeli Vessels

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 Strait of Hormuz 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 el-Mandeb 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 oil tanker Heroic Idun, which 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.”

Jo Harper is a freelance British journalist. This article  was edited by Tim Rooks, and it is published courtesy of Deutsche Welle (DW).