Escalation: US And Houthis Continue To Trade Shots, As Red Sea Turmoil Creates Shipping Quagmire Leading To More Inflation

Tensions in the Red Sea continue to escalate as the Israel-Hamas war is now becoming a growing regional conflict. The U.S. and the Yemenis Houthis continue to trade shots in the Red Sea, causing significant shipping logjams and delays, which will only further drive the costs of energy and commodities higher.

Yesterday U.S. Central Command (CENTCOM) reported that a Houthis, who the U.S. continues to emphasize is backed by Iran, struck a U.S.-owned commercial vessel.

The bulk carrier Gibraltar Eagle is seen off Kristiansand, Norway, June 29, 2023. Houthi rebels fired a missile striking the U.S.-owned ship, Jan. 15, 2024, just off the coast of Yemen in the Gulf of Aden. Courtesy: AP

In response, the U.S. hit back with their own strikes today around midday, which in turn rattled the markets. Typically retaliatory strikes such as these happen near or after the closing bell as not to gyrate markets too much. CENTCOM said in a press release:

On Jan. 16 at approximately 1:45 p.m. (Sanaa time), Iranian-backed Houthi militants launched an anti-ship ballistic missile from Houthi-controlled areas of Yemen into international shipping lanes in the Southern Red Sea. M/V Zografia, a Maltese flagged bulk carrier, reported they were struck, but seaworthy, and were continuing their Red Sea transit. No injuries were reported.

Additionally, following the Jan. 15 attack on the M/V Gibraltar Eagle, a Marshall Islands-flagged, U.S.-owned and operated container ship, on Jan. 16 at approximately 4:15 a.m. (Sanaa time), U.S. Forces struck and destroyed four Houthi anti-ship ballistic missiles. These missiles were prepared to launch from Houthi-controlled areas of Yemen and presented an imminent threat to both merchant and U.S. Navy ships in the region.

Moreover, CENTCOM also reported that U.S. forces seized Iranian weapons that purportedly were to be sent to supply the Houthis. This is the first such type of seizure since conflicts with the Yemen-based militia began in December. They wrote:

“U.S. Navy SEALs operating from USS Lewis B Puller (ESB 3), supported by helicopters and unmanned aerial vehicles (UAVs), executed a complex boarding of the dhow near the coast of Somalia in international waters of the Arabian Sea, seizing Iranian-made ballistic missile and cruise missiles components. Seized items include propulsion, guidance, and warheads for Houthi medium range ballistic missiles (MRBMs) and anti-ship cruise missiles (ASCMs), as well as air defense associated components. Initial analysis indicates these same weapons have been employed by the Houthis to threaten and attack innocent mariners on international merchant ships transiting in the Red Sea.”

It is clear that Iran continues shipment of advanced lethal aid to the Houthis. This is yet another example of how Iran actively sows instability throughout the region in direct violation of U.N. Security Resolution 2216 and international law. We will continue to work with regional and international partners to expose and interdict these efforts, and ultimately to reestablish freedom of navigation.

said General Michael Erik Kurilla

In December The WinePress highlighted how these skirmishes are creating global trade distortions, as many shipping companies and freighters are changing their routes to avoid being attacked but means that the supply of goods and resources are taking much longer than usual. Now the effects are getting worse…