UK Navy Alerted To Incident Near Djibouti As Houthis Paralyze Red Sea Shipping
International shipping in the Red Sea and vital Bab al-Mandab Strait is grinding to a halt with tankers, container ships, and other types of commercial vessels rerouting around the Cape of Good Hope to avoid missile and drone attacks from Yemen's Iran-backed Houthis.
In a report that has become almost daily this week, Bloomberg states that the United Kingdom Maritime Trade Operations is monitoring a new potential incident involving a commercial vessel. This latest incident is said to have occurred around 80 nautical miles northeast of Djibouti.
On Monday, Houthi rebels attacked two commercial ships in the Red Sea. Full details of the attacks were not immediately known, but spurred a handful of major shipping companies to halt transit through the Red Sea.
At least seven major shipping companies, including Taiwanese container shipping line Evergreen, Belgian tanker owner Euronav, energy giant BP Plc, Maersk, Hapag-Lloyd, CMA CGM, and Mediterranean Shipping Company have paused all commercial vessel operations through the Red Sea that connects to Egypt's Suez Canal.
Spillover risks of the Israel-Hamas war are quickly building, as the Red Sea is responsible for 10% to 12% of the world's international trade. These mounting risks have forced London maritime insurers to demand war risk coverage for vessels that want to transit the Red Sea.
Red Sea is now largely closed to traffic. That's 8.8 million bpd of daily oil transit, and nearly 380 million tons of daily cargo transit.
— zerohedge (@zerohedge) December 18, 2023
Global traffic now will be rerouted around Cape of Good Hope, adding 40% to voyage distance (and even more to cost) pic.twitter.com/Xct7x03tFI
On Monday, US Secretary of Defense Lloyd J. Austin said the US and allies, including the UK, Canada, France, and others, are creating a new naval task force to protect critical maritime shipping lanes.
"This is an international challenge that demands collective action," Austin said in a statement.
Politico's chief Pentagon correspondent Lara Seligman wrote on X that the new task force to protect commercial vessels in the conflict area will be called "Operation Prosperity Guardian" and will be announced formally on Tuesday.
It has also emerged that Australia is expected to play a major role in Red Sea operations.
U.S. warships currently operating in the Red Sea https://t.co/iUnBov1hkR pic.twitter.com/bqNwlDq18M
— Financelot (@FinanceLancelot) December 18, 2023
Rabobank warned in a note to clients that Red Sea disruptions "is a big problem" and the West has much to lose:
"150 years of supply chain improvement risks being unwound as major shipping companies redirect vessels around the Cape of Good Hope to avoid traversing the region to pass through the Suez Canal into the Mediterranean."
Diversions have already begun.
Suez update: 46 container ships now have diverted around the Cape of Good Hope rather than transiting the Red Sea. pic.twitter.com/4zaTXn3LO1
— Ryan Petersen (@typesfast) December 18, 2023
Disruptions in the Red Sea are happening at a time when an El Nino-caused drought severely restricts the Panama Canal on the other side of the world.