US attacks Houthi anti-ship missiles in new strikes; vessel hit in Red Sea

WASHINGTON/DAVOS - The United States military carried out new strikes in Yemen on Jan 16 against anti-ship ballistic missiles in a Houthi-controlled part of the country, as a missile struck a Greek-owned vessel in the Red Sea.

Attacks by the Houthi militia on ships in the region since November have affected companies and alarmed major powers – an escalation of Israel’s more than

three-month-old war with Palestinian Hamas militants in Gaza.

The Houthis say they are acting in solidarity with the Palestinians.

The Houthis have threatened to

expand their attacks to include US ships

in response to American and British strikes on its sites in Yemen.

In a bid to cut off their funding and supply of weapons, US President Joe Biden’s administration plans to put Houthi rebels back on a US list of terrorist organisations, two US officials told Reuters.

The Biden administration in 2021 had taken the Houthis off two lists designating them as terrorists. That was a reversal of a decision by former president Donald Trump.

The latest move would put the Houthis back on one of the two lists, marking them as “specially designated global terrorists”.

The White House said additional US strikes on Jan 16 took out ballistic missiles that the Houthis were ready to launch, confirming a Reuters story earlier, which cited US officials, that a new strike was launched at four anti-ship missiles. The strike had not been previously reported.

“We are not looking to expand this. The Houthis have a choice to make and they still have time to make the right choice, which is to stop these reckless attacks,” White House spokesman John Kirby said.

France chose not to take part in the US-led strikes because it wants to avoid a regional escalation, President Emmanuel Macron told a news conference. The country has a “defensive” approach in the Red Sea and would stick to this stance, Mr Macron said.

Two heads of international banking groups attending the World Economic Forum in Davos, Switzerland, said privately that they were worried the crisis might cause inflationary pressures, which could ultimately delay or reverse interest rate cuts and jeopardise hopes for a US economic soft landing.

Mr Yuvraj Narayan, chief financial officer of Dubai-based logistics company DP World, said he expected disruptions to hit European imports.

“The cost of goods into Europe from Asia will be significantly higher,” he told Reuters at the annual meeting in the Swiss ski resort. “European consumers will feel the pain... It will hit developed economies more than it will hit developing economies.”

War risk insurance premiums for shipments through the Red Sea are rising, insurance sources said on Jan 16.

In Spain, four factories owned by French tyre-maker Michelin are planning to halt output again this weekend, a further sign of the impact of delays in the delivery of raw materials.

Ship hit

A Malta-flagged, Greek-owned bulk carrier was struck by a missile while northbound in the Red Sea, 76 nautical miles north-west of the Yemeni port of Saleef, said a security firm and two Greek shipping ministry sources.

The military spokesman for the Houthis, Mr Yahya Sarea, said it carried out the attack on the ship, the Zografia, using naval missiles, resulting in a “direct hit”.

The Zografia was sailing from Vietnam to Israel with 24 crew members on board and was empty of cargo when attacked, one of the Greek sources said. “There were no injuries, only material damage,” the source added. It was still sailing, but would probably reroute for safety checks.

Underlining concerns, Japanese shipping operator Nippon Yusen, also known as NYK Line, instructed its vessels navigating near the Red Sea to wait in safe waters and is considering route changes, a company spokesperson said.

Shipping giant Maersk, however, sent two container ships through the Red Sea carrying goods for the US military and government.

Gaza ceasefire call

Container vessels have temporarily stopped entering or been diverted from the Red Sea, which leads to the Suez Canal, the fastest freight route from Asia to Europe. Many ships have been forced to circumnavigate South Africa’s Cape of Good Hope instead.

About 12 per cent of world shipping traffic accesses the Suez Canal via the Red Sea.

Egypt’s Suez Canal authority played down any disruption, saying in a statement that the suspension of transit through the canal by companies was temporary, and that traffic through the canal was “going as per normal”.

British oil major Shell has suspended all shipments through the Red Sea indefinitely after the US and UK strikes triggered fears of further escalation, the Wall Street Journal reported on Jan 16. Shell declined to comment.

US oil major Chevron said it is maintaining its shipping routes through the Red Sea. Exxon Mobil, which does not own or operate shipping vessels, said it “continues to support ship owners and operators in following guidance from the Combined Maritime Forces” – a reference to a multinational naval partnership aimed at keeping the seas safe.

Russian tanker group Sovcomflot is also considering alternative routes in case the crisis escalates, Tass news agency reported. Sovcomflot did not immediately respond to a Reuters request for comment.

European diplomats said European Union member states had given initial backing to the creation of a naval mission by Feb 19 at the latest to help protect ships.

The existing US-led coalition meant to safeguard commercial traffic in the Red Sea is weak because regional powerhouses Saudi Arabia, the United Arab Emirates and Egypt have not taken part, Yemen’s Vice-President said on Jan 16.

“This Bab al-Mandab corridor is of interest to the whole world and to the region, so regional intervention is key,” Mr Aidarous al-Zubaidi told Reuters in an interview, referring to the narrow strait at the southern entrance to the Red Sea.

Mr Zubaidi’s separatist Southern Transitional Council is part of an alliance that opposes the Houthis in Yemen.

Saudi Arabia said it is incredibly concerned about Middle East security as the fallout from the Israel-Hamas war spreads across the region.

Foreign Minister Prince Faisal Bin Farhan Al Saud reiterated that there needs to be a ceasefire in Gaza to help bring about a resolution to the central conflict, and that international powers should use diplomacy to end the Houthi group’s shipping attacks in the Red Sea.

“We are incredibly concerned for regional security,” he said on a panel at the WEF. “Freedom of navigation in the Red Sea impacts all of us. We think the priority needs to be de-escalation – de-escalation in the Red Sea and in the entire region. Part of that is making sure we engage with all stakeholders.” REUTERS, BLOOMBERG