The Ripple Effect: Houthis Insurgency and Red Sea Trade

Missiles, drones and boarding actions by a Islamist group have decimated trade passing through the Red Sea. What are world powers going to do about it?

Ansar Allah, better known as the Houthis movement, is a Shia militia and political movement based in Yemen. Since 2009, it has increasingly received military support from the Islamic Republic of Iran to fight the government of Yemen and, from 2015, a Saudi-led military coalition. As a result of the Israel-Hamas war, which began in October 2023, the group is currently attacking shipping passing through the Bab el Mandeb strait into the Red Sea. 

Consequently, some of the world's most significant shipping companies are diverting cargo around the Horn of Africa while the US has attempted to assemble a coalition to project shipping. Although it has been successful at protecting against attacks, shooting down 61 drones and missiles, the cost asymmetries are not sustainable, and the operation has thus far not reassured shipping companies, who have redirected their cargo ships thousands of miles south around the Cape of Good Hope. 

The Biden administration faces a complex problem, balancing competing allies' various interests, especially in the context of the Israel-Hamas war. Furthermore, it must decide if military action against the Houthis is worth it to attempt to resolve the threat to shipping. Is dragging the US into a conflict during an election year, while the US is already supporting two nations at war and with an increasing Chinese threat to Taiwan worth the risk?  

The Houthis and Iran

Ansar Allah began in the early 1990s as a theological movement based in former North Yemen to promote the growth of Zaydism, a branch of Shia Islam. The movement grew throughout the 1990s under the leadership of the al-Houthi brothers (Abdul-Malik, Yahia, Abdul-Karim, Hussein, Ibrahim, and Abdulkhaliq) and saw rising tensions with the government of Ali Abdullah Saleh. In 2004, Hussein al-Houthi was killed after the Government began arresting members of the movement, leading to an uprising. After his death, the movement took his name, and the uprising continued under Abdul-Malik. 

After a ceasefire in June 2005, sporadic fighting continued with various intensity until 2009, when the Yemeni government undertook Operation Scorched Earth, at which point Iran, a fellow Shia nation that follows the Imāmiyya branch of Islam, is first estimated to start seriously arming the Houthis. For decades, Iran has been engaged in a bitter struggle with its regional rival, Saudi Arabia. Supporting the Houthis by causing discord on Saudi Arabia’s borders was a natural opportunity for the Iranians. 

Operation Scorched Earth ended in 2010 with a ceasefire. In 2012, President Saleh resigned in the wake of the Yemeni revolution, and President Hadi took over. This did not lead to stability but continued conflict, and in 2014, the Houthis took control of the capital, Sanaa. At this point, they controlled around half of the country and a majority of Yemen's 28 million-strong population. In February 2015, the Houthis took control of the government, leading to a Saudi Arabian-led coalition launching Operation Decisive Storm to reinstall President Hadi and the internationally recognized Government of Yemen. 

The coalition (shortly renamed Operation Restoring Hope) launched against the Houthis was, on paper, at least, formidable. In addition to Saudi Arabia, the United Arab Emirates, Egypt, Morocco, Jordan, Bahrain, Sudan, and Kuwait all committed to various levels of military support. Saudi Arabia was able to assemble this coalition as Iran's backing of the Houthis had increased considerably since 2009, and although Iran and the Houthis do not share entirely the same theological views, they were viewed as enough of a threat by the various coalition members. The coalition also had the backing of the US and the United Kingdom with weapons, training, and muted political support. Although it was a large coalition, at the same time, the Islamic State was rampaging through Iraq and Syria, and some states were far more focused on that threat, contributing little to the conflict in Yemen. 

Saudi Arabia was far from successful in this conflict. By 2019, US congressional political support for the coalition as Yemen fell into famine, and the Saudis were accused of committing a series of atrocities, leading President Trump to veto a bipartisan congressional measure to end the US involvement in the war.  The UAE had entirely withdrawn from the war in the same year, but Saudi Arabia could not extricate itself.

In August 2019, the Houthis claimed to have launched a drone and cruise missile attack on Saudi oil processing facilities in Abqaiq and Khurais, over 1000km from Yemen. The attack was shocking. US-supplied MIM-104 Patriot missiles and Skyguard Air Defence Systems and radar were defending the facilities. Although the Houthis claimed responsibility for the attack, the 18 IRN-05 UAV drones and seven Ya-Ali cruise missiles were more likely fired from Iran.  

The Covid pandemic brought a pause to further fighting for a brief while before violence scaled up again in 2021 when the Houthis launched an assault on the Marib province. By 2022, the Saudi coalition had lost the war, President Hadi had been forced from power on the Yemeni Presidential Leadership Council by the Saudis to be replaced by Rashad al-Alimi, and Yemen settled into an uneasy peace. 

Map of Yemen, September 2023 - The Houthis are shown in green, the Government of Yemen in red, and the Southern Transitional Council in yellow - source.

The Red Sea Threat  

Although Iran is not allowed to export weapons, it has nevertheless supplied groups affiliated with it with thousands of missiles and drones, as well as designs and engineers to help the groups manufacture their own. These proxies help extend Iranian influence far beyond its borders. The Iranian-designed missiles that Hamas has been launching since October 2023 were constructed by a mix of manufacturing in the strip and smuggling. Hezbollah’s missiles in Lebanon are also positioned to pose an Iranian threat to Israel and shipping in the Meditteranean. 

However, Yemen's position adjacent to a crucial shipping lane means the Houthis have more interest in Iranian-designed anti-ship missiles than other Iranian proxies. These include the Asef missile, based on the Fateh-313 ballistic missile with a range of 450 kilometers carrying a payload of more than half a ton. Some captured missiles from Yemeni Government stockpiles have been converted into makeshift ballistic missiles, such as the Muhit missile, which was converted from Soviet-era SA-2 Guideline missiles.  

On the 15th of November, more than a month after the Israel-Hamas war began, the Houthis hijacked the Galaxy Leader cargo ship. In December, they then issued a threat to all ships connected to Israel transiting the Red Sea “unless Gaza’s needs for food and medicine are met.” Further attacks on ships such as the Norwegian-owned Swan Atlantic, carrying vegetable oil, and MSC Palatium III, a container ship, demonstrated the Houthi's willingness to follow up on their threats. 

As the Houthis have attacked ships with tangible links to Israel at best, insurers and shipping companies have decided to avoid the Red Sea until further notice to avoid ballistic missile and air/sea drone attacks and boarding attempts by the militants. In terms of the Houthis goal of attacking Israeli trade, Eilat Port on the Red Sea has seen an 85% drop in traffic since the crisis began, although Israel's largest ports are situated on its Mediterranean coast. Importantly, the Houthis have not yet targeted oil or gas shipments. 

Around 12% of all global trade and over $1 trillion worth of goods pass through the Red Sea every year, and more than ​​50 ships a day pass through the Suez Canal at the northern end. When the Ever Given container ship wedged itself in the Suez Canal in 2021 for six days, it caused over $9 billion worth of trade to get stuck. Depending on the destination, sailing around the Cape of Good Hope can add 30-40% extra distance for ships sailing from the Persian Gulf, typically oil or LNG shipments. For cargo ships sailing from Asia to Europe or Africa, the % increase is smaller but adds thousands of miles and as much as two weeks extra sailing time.

Due to this considerable disruption to global trade, on the 18th of December, the US announced a naval coalition to help protect ships passing close to the danger area. While the initial announcement included over 20 countries, only the United Kingdom has provided a ship to the US-led coalition so far, and only two more, Denmark and Greece, are currently planning to join, sending a single ship each. Some nations, such as France, Italy, and India, refused to join Prosperity Guardian because they do not want to be seen as contributing to allowing Israel to continue its war against Hamas. In protecting the shipping lane under a US-led coalition, less political pressure would be on the Israelis to end the war.

Similar to the Saudi-led “coalition” that fought the Houthis from 2015, the “coalition” is dominated by one country. The task force is headed by the USS Dwight D Eisenhower, a Nimitz class supercarrier with over 90 fighters and helicopters. Although one of the most powerful naval assets available in the world, it is not the carrier that has primarily been engaged in intercepting the Houthis missile and drone attacks, but her escorts, the USS Laboon, USS Gravely, and HMS Diamond, all air defense destroyers. 

The USS Laboon and USS Gravely are Arleigh-Burke class destroyers that used Standard Missile-2 Block IVs to shoot down the incoming Houthi attacks. These missiles cost over $2 million each, while the Houthis are shooting at ships for a few thousand dollars a pop, and their drones cost as little as $2000. Although Arleigh-Burke destroyers are able to use much cheaper 5-inch gun munitions to shoot down drones (as demonstrated by the USS Carney last year), this is not always an option. HMS Diamond, which used a Sea Viper missile (similar in price to US missiles) to shoot down a drone, is not able to use its 5-inch gun to shoot drones because software support enabling the gun to track small targets was withdrawn, and will not be available until the end of 2026 when new British frigates come into service. Its Sea Viper missiles can also not officially shoot down the missiles the Houthis are launching, although its radar system can help identify incoming threats for the rest of the task force.

It is simply not sustainable to shoot down drones costing thousands, with munitions costing millions. Although the US Navy has been working on a high-powered laser system to enhance air defensive capabilities, it is not currently available in this crisis. In the meantime, the Biden administration has to make a choice. 

An imagined US carrier-led naval task force in the Red Sea.

No good options 

The US has a number of options on what to do next. It can continue to operate Prosperity Guardian as it currently is and bear the asymmetric cost, hoping for no changes in strategy from the Houthis or other regional crises to break out. It could launch airstrikes on Houthi positions to try to degrade their ability to threaten shipping and attempt to convince them to stop by inflicting enough pain. The US could do this independently or could start an operation in cooperation with the internationally recognized Government of Yemeni, which currently has a ceasefire with the Houthis. It could attempt to persuade regional allies to attack the Houthis with US support or lower their objections to US action. It could accept that shipping is unlikely to return to the Red Sea while the Israel-Hamas war is ongoing and send its ships home until Hamas has been eliminated or Israel is forced to stop either through domestic or political pressure. 

The last option is deeply unlikely. Giving up would be an incredible sign of weakness and would embolden the Houthis, their backers in Iran, and every other US adversary. The US’s regional allies - Saudi Arabia, the UAE, Qatar, and Bahrain, among others - all share a desire to see the Israel-Hamas war end and, like Western nations who have not committed to Prosperity Guardian, do not want to be seen to contributing to allowing Israel to continue with its war.  

Launching strikes against the Houthis is an option available to the US. Although this is feasible from a military standpoint with the ability to launch strikes from carrier-based aircraft in the area, cruise missiles from other naval assets, or longer-range strikes from bases using air-to-air refueling, it is unlikely the Houthis ability to threaten shipping would be seriously disrupted by a few precision strikes. The group has the ability to move its missiles around and has years of experience avoiding Western-trained Saudi pilots conducting airstrikes.

It is doubtful that striking Houthi positions would cause enough political pain to cause them to stop. The group does not rule Yemen as a democracy, and although not a direct puppet of the Iranian regime, it is dependent on Iranian support, and Iran will not want the pressure on the US to let up. The Houthi leadership has also been adamant that they are willing to withstand US action and may even escalate. Attacks inside Yemen could also invite further attacks on the carrier group aimed at seriously hitting one of the vessels in a combined anti-ship missile/swarm drone attack, which would attempt to overwhelm the air defense to seriously damage or sink a ship. 

Although action could be unilateral, the United Kingdom, which thinks of itself as the closest US ally, is considering airstrikes if the US goes ahead. The Royal Navy has aircraft carriers that claim to be ready to sail from southern England in 72 hours, but the Queen Elizabeth class aircraft carriers do not have enough escorts to protect them as a part of a British-only task force. HMS Diamond is currently the only one of six Daring class destroyers available. British forces do have access to bases proximate to the Middle East, but British aircraft flying from RAF Akrotiri in Cyprus would need to fly a long route over Egypt, which is not guaranteed to grant permission, or through Israeli airspace, a politically sensitive route. Qatar is unlikely to be happy about RAF flying missions from Al Udeid Air Base, and any missions would need air-to-air refueling as Saudi Arabia may refuse permission to use its airspace as well. An alternative option would be Camp Lemonnier, the US base in Djibouti, to host British aircraft longer-term if a campaign was started and looked like it would continue for some time.

Although some forces say they are willing to fight the Houthis with Western support, these are relatively weak. Perhaps more importantly, the US’s regional allies do not want to disturb the fragile ceasefire that exists between the Houthis and the Yemeni. This calculation may change if the Houthis actions significantly alter their relative negotiating power versus the US’s regional allies. Additionally, it is not impossible for the US to decide to support the weaker side in a conflict that its allies suggest is deeply unwise. 

Involving US forces in a conflict with no clear way of ending it is also likely unpopular at home. Although the situation has now changed with the threat to shipping, it is only a few years since Congress bipartisanly called for an end to US support for the Saudi-led coalition. It is also an election year, with many supporters of President Biden wanting an end to the Israeli-Hamas war. 

Operation Status Quo  

Absent other crises that require US attention, if the Houthis were attacking shipping, then launching some punitive strikes may already have happened. The Houthis only have the opportunity to threaten international shipping because of the delicate situation the Israeli-Hamas war has created, and any US military action will cause fallout that will have to be further managed.

With an overstretched US Navy, next to no allies willing to help protect shipping in a combined effort, and few tangible benefits from launching a campaign of punitive strikes, the Biden administration may decide that doing more than continuing their current limited operation is the best course of action. Despite the high cost to international trade, the political and military risk from striking the Houthis, without much support from allies over a sea route that does not hugely affect American energy imports or trade (most trade between the US and Asia flows through across the Pacific, with significant amounts then passing through the Panama Canal) does not seem particularly attractive. The US is already dealing with its forces under attack in Iraq from Iranian proxies, and if the situation gets worse, it will need some capacity to respond. If a conflict between Ethiopia and Eritrea breaks, then the US may not want to be engaged in a campaign of strikes on the other side of the straits. It also has to bear in mind that less pressure will be on the Israelis to end their campaign against Hamas, as the disruption to trade will be seen to have been escalated by the US. 

The efffective closure of the Red Sea will primarily affect Gulf states exporting fuels through the Suez Canal and trade between Europe and Asia. Although France and Italy have forces in the area to protect their own shipping, most European states are relying on the US to ensure the safety of their shipping. If it engaged in offensive actions against the Houthis, it would bear all of the risk for little reward, which makes little strategic sense. If energy prices rise and shortages emerge in Europe, this is not a priority for the US. In the European-wide EU elections in June, right-wing parties may make gains due to dissatisfaction over the economy and immigration, which should make some European governments worry, but due to persistent underinvestment in their militaries, few European countries can project force independent of the US. If pressure builds, more countries could be tempted to join Prosperity Guardian, easing the burden on the US - but this will only happen with time. 

Chinese exporters to Europe seeing increased costs may induce the Chinese government to pressure the Iranian government to pull the leash on the Houthis. Overstretching the US military is in China’s interest, especially if it wants to take military action over Taiwan with Taiwanese forces in disarray. However, there are no indications (with the first of two annual weather windows to invade across the straits of Taiwan soon approaching) that militarily disrupting the US is a priority for Xi Jinping, particularly amid concerns over rampant corruption in the Peoples Liberation Army Rocket Force.

Although oil and gas exports are currently not being targeted, the US may come under diplomatic pressure from Gulf allies to do something about the Houthi threat because of the effects it may have on strengthening the Yememi group’s future political strength. Here again, the US would bear most of the political and military cost for its allies, and if it happens, the Gulf states would surely be offering something in return.

Maintaining an aircraft carrier strike group firing expensive missiles to shoot down cheap drones is not in the dictionary definition of doing nothing, and nor is it ideal. However, compared to the other options available to the US, it might be exactly what happens.

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