In March 2021, a 1,300ft container ship rammed into the side of the Suez Canal, blocking one of the world’s most important trade routes. What followed was a week of chaos, as hundreds of cargo ships, carrying billions of dollars’ worth of goods, were forced to wait for the blockage to be removed. Some companies gave up on waiting and embarked on the much longer journey around the southernmost tip of Africa, others simply sat in place. In the end, the Egyptian authorities were able to get traffic moving again – yet the damage had already been done.
In the months that followed, the price of computer chips, cars, and other household goods went up due to the delays in delivery and disruption to global supply chains. Inflation, that was already gnawing away at peoples’ wallets as a result of government responses to the Covid pandemic, went up even more. All of this because of a careless mistake in the Suez Canal – one that was easily remedied and cleared.
The problem, however, has turned out to be much more long-term – for as the West panicked over clearing the canal to avoid further economic problems, a strategic and economic vulnerability was exposed.
As much as 12% of global trade, and 30% of the worlds shipping traffic pass through the Suez Canal every year. An estimated $3-9bn worth of goods pass through per day, everything from cars, computers, and luxury goods to garden rakes, lightbulbs, and bin bags. Yet all of that can be disrupted, to enormous detrimental effect, by simply blocking the Canal.
One group that took notice of this weak spot was the Iranian Regime and its proxies across the Middle East – in particular their Yemeni allies the Houthi militia. Since 2014, the Iranian Revolutionary Guard Corps (IRGC) has been backing the Houthi in an ongoing civil war, with the aim of overthrowing the UN Recognised government and installing a regime of their own.
For Iran, Yemen also became a convenient base for their other activities. A country locked in a frozen conflict, that unlike Lebanon and Syria, didn’t attract the West’s attention. It was the perfect destination to conduct weapons tests – against live targets – with limited international outcry. As early as 2017, reports demonstrated that Iran had started testing missiles within the country – in direct contravention of its international agreements signed with the United States. By 2021 those same missiles were being aimed at neighbouring Saudi Arabia – with a missile landing in Jeddah in March 2022 a week before a Formula 1 Race. US-led counter piracy operations in the region also began stopping fishing boats loaded with Iranian manufactured rifles, destined for the Houthi.
Saudi, along with a coalition of Egypt, the UAE, and Bahrain, launched airstrikes of their own against the Houthi in a bid to support the UN-recognised government. However, their attempt to step in was met with international condemnation over the accidental hitting of civilian areas. Desperate, Saudi and other allies reached out to the West for support – but received little help. This emboldened Iran to continue its support for the Houthi, including offering IRGC training to Yemeni militants.
The aftermath of the Suez blockage presented yet another unique new opportunity for Iran to use its proxy in Yemen to create a base from which to launch operations across the entrance to the Red Sea – the infamous Bab-el-Mandeb straits – and disrupt global trade. The only obstacle being China, who in the Horn of Africa, had already established a naval base in Djibouti for counter-piracy measures.
In 2021, Tehran and Beijing signed a comprehensive economic agreement that would see the country become a transit country for the Belt and Road initiative – in effect allowing goods to be transported by rail from China, through Iran, to the West. What is theorised, is that a part of the agreement established that Chinese ships would be exempt from targeting.
All Iran and the Houthi needed was a convenient excuse to put their plan into action. The Israeli response to Hamas attacks on the 7 October 2023 provided the perfect excuse. Claiming to be acting in solidarity with Palestine, the Houthi started launching on internationally flagged ships passing through the Bab-el-Mandeb straits. These raids were well rehearsed and well orchestrated, using equipment far more advanced than was ever expected for the Houthi rebels.
For the first time, the West finally had to come to terms with the crisis in the Red Sea. The airstrikes that took place on the night of the 11th of January, by the US/UK Coalition with other allies, dealt a blow to the Iranian-backed militants. However, a major question remains, why did it come so late? Why did the West choose to ignore a threat that had been well reported and documented? Especially given Iran and its proxies have a track record of seizing vessels in the Gulf on the other side of the Arabian Peninsula.
The consequences of Houthi and Iranian action in the region are becoming clear – this week Tesla and Volvo have already announced the pausing of the rollout of new cars due to a shortage of parts as a result of the chaos in the Red Sea.
The simple fact is that the West has been asleep at the wheel. A combination of increased isolationist feelings at home, the Covid pandemic putting the Middle East on the backburner, and a feeling of withdrawal after the disastrous retreat from Afghanistan, has created a vacuum in the region. The US, UK, France, and others had previously stepped in to provide stability, and yet in their absence Iran’s influence has spread, with the tacit approval of allies China and Russia.
Now, just as Western nations are finally seeing inflation rates slow, there is a risk that further disruption in the Red Sea region could put Suez under strain again, and once more disrupt global supply chains, delay consumer goods, and lead to a further spike in inflation. Some may argue that the UK and US had no reason to intervene in Yemen as they did – yet the cost of doing nothing would be far higher.
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