Yemen’s Houthi rebels continue to target commercial vessels in the Red Sea – using missiles, drones and helicopters. They claim the ships they attack are linked to Israel.
Given the importance of the Red Sea shipping route to global supply chains, concerns are rising that costs for some goods could skyrocket.
In Europe, US allies are torn between supporting Washington-led efforts to protect freedom of navigation in the Red Sea and protecting Europe's own commercial interests, while also wanting to avoid contributing to rising tensions in the Middle East.
Chain effect
While it may be a long way from the turbulent waters to Paris, Berlin or Rome, Nils Haupt, head of corporate communications at Hamburg-based shipping giant Hapag-Lloyd, told CGTN that what happens in the Red Sea has a major knock-on effect on global shipping.
“The Red Sea is extremely important for the maritime sector because it connects the Far East with Northern Europe as well as the East Coast of the United States and the Eastern Mediterranean,” said Haupt. “It also shortens travel times, for example it takes about three weeks to get to the Eastern Mediterranean, one week to get to the East Coast of the United States and 10-14 days to get to Northern Europe.”
One of Hapag Lloyd’s cargo ships was attacked by Houthi rebels on December 18 last year. Mr. Haupt told CGTN that this was a big shock for the international shipping giant.
“Fortunately, no one was injured, but some containers fell into the sea and some were damaged,” said Haupt. The Hapag-Lloyd representative said this was the first time they had encountered a situation like this and had no experience in how to react.
A Houthi military helicopter flies over the Galaxy Leader cargo ship in the Red Sea in this photo released on November 20, 2023. Photo: Jerusalem Post
The world’s top shipping lines, including Hapag Lloyd, CMA CGM and Maersk, have stopped sailing through the Red Sea and the Suez Canal, opting instead for the longer route around the Cape of Good Hope to the west, adding significant travel time and cost—around $1.25 million—per voyage, depending on destination. All of those extra costs are expected to be passed on to end consumers.
About a third of the world's container traffic passes through the Red Sea and the Suez Canal. This includes 12% of global oil tankers and 8% of the world's liquefied natural gas (LNG).
It is also the main route for palm oil into Europe, which is used in everything from chocolate to snack foods. With the Houthis stirring up the Red Sea, prices for these products are sure to rise because, as Haupt told CGTN, the cost of getting the goods to Europe has increased significantly.
“To go to the Eastern Mediterranean, it used to take 10 days to go through the canal, now it takes 18 days. So that means more fuel costs,” said Mr. Haupt, estimating that his company would incur at least $10 million in additional costs in just one month.
The real risk in Berlin and other European capitals is that the inevitable rise in consumer costs could push economies – already struggling – back into the quagmire of spiralling inflation.
Europe's dilemma
On the “old continent”, Germany and Italy have joined the group of countries that have issued stern warnings of military consequences to the Houthis if they continue to attack shipping in the Red Sea. However, the EU’s most powerful naval powers, France and Spain, are absent from the US-led anti-Houthi coalition.
Europe is torn between supporting US-led efforts to protect freedom of navigation in the Red Sea and protecting its own commercial interests, and wanting to avoid contributing to rising tensions in the Middle East.
Europe faces the challenge of “striking the right balance between stance and decision,” said Farea Al-Muslimi, a researcher with the Middle East and North Africa programme at Chatham House.
“Europe is doing its best to avoid further conflict in the region since the Gaza war has resumed. At the same time, it cannot let the Houthis get away with it. Because that could also embolden other militant groups in the Horn of Africa,” Al-Muslimi explained.
An Israeli Navy missile boat patrols in the Red Sea off the southern Israeli port city of Eliat, December 26, 2023. Photo: RNZ
While the US-led operation, dubbed “Operation Prosperity Guardian” (OPG), initially enlisted the support of six European countries, several countries later abandoned the effort over concerns that it could increase tensions and lead to an escalation of conflict in the Middle East.
Italy said that while it was sending a naval frigate to patrol the area, this would “take place as part of an existing operation authorised by the Italian Parliament and not Operation Prosperous Guardian OPG”.
The French Defense Ministry said it welcomed initiatives aimed at strengthening freedom of navigation in the Red Sea such as the OPG but also stressed that its warships in the region would remain under French command.
Like Britain and the United States, France is not afraid to engage the Houthis directly in the Red Sea, but it also has a “de-Gaulle style” priority, asserting that France is a great power and therefore should not follow anyone else.
German Chancellor Olaf Scholz boards a boat to the destroyer Mecklenburg-Vorpommern, June 5, 2023. Photo: Getty Images
French President Emmanuel Macron is expected to respond more forcefully if the disruptions escalate, but there is still a sense of caution as French officials question whether the US action will further destabilize the region.
In Spain’s case, Prime Minister Pedro Sanchez has called for the creation of another task force to patrol the region and protect European commercial interests, rather than joining forces with the US or using the EU’s Atalanta anti-piracy naval force to protect ships passing through the Red Sea from Houthi attacks.
Avoiding escalation in the “powder keg” region is wise, says Bloomberg columnist Lionel Laurent. But the result, he says, is a twofold problem: Europe’s strategic backyard is becoming a more dangerous place, and Europeans are not doing enough to come up with a unified response .
Minh Duc (According to CGTN, Euronews, Bloomberg)
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