Impact of the Red Sea Crisis on Global Supply Chain

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Recent developments in the Red Sea raise concerns about the spread of the conflict between Hamas and Israel in the region. Since November 2023, the Houthis’ seizure of Israeli and Israeli-linked vessels in the port of Hodeidah,[i] as well as the attacks on such vessels with missiles and drones, have focused international attention on the Houthis. These actions by the Houthis, who have announced that they will continue military operations until Israel’s attacks on Gaza cease, have strained the Israeli port of Eilat and paralyzed commercial traffic.[ii]

This situation underlies the Red Sea crisis and has severe regional geo-economic implications. The Red Sea is a critical region for maritime trade and especially for energy transportation. Therefore, the consequences of attacks on vessels in the area rapidly manifest in the global economy. In fact, the cost of containers passing through the Red Sea has quadrupled in a matter of weeks,[iii] and trade traffic in the region has declined. [iv]

Moreover, the political background of the crisis in the region reveals that, in addition to the Houthis’ anti-Zionist and anti-Semitic ideological positions, their desire to strengthen internal consensus and divert attention from their government’s failures prompted them to launch attacks in the Red Sea. The US response to the Houthi attacks has so far taken place in two phases. It began in December 2023 with the creation of a multinational naval mission, the “Prosperity Guard”[v] operation, followed by Anglo-American strikes against Houthi military installations starting in January 2024. [vi]

One of the effects of the Red Sea crisis is a change in European and American perceptions of the Houthis. For a long time, the Houthis were seen as local actors in Yemen, and Yemen was perceived as peripheral to regional and global dynamics. However, when the Houthis attacked vessels they believed to be linked to Israel in the Red Sea, disrupting the global supply chain, their potential as a threat to international trade became clear.

Also notable is the lack of coordination between the European Union and the United States in response to the shipping crisis in the Red Sea. [vii] International reactions to the threat posed by the Houthis are varied, with the United States and the United Kingdom aiming to weaken Houthis’ offensive capabilities and restore freedom of navigation. On the other hand, the Europeans seek a risk-reducing response, avoiding an expansion of the ongoing conflict in the region. In this context, it is noteworthy that the UK and the US have responded swiftly to the Houthi threat in the Red Sea to achieve their goals.

As for the European Union’s reactions, French President Emmanuel Macron stated that Paris “decided not to participate” in the US and UK attacks on Houthi rebels in Yemen to “prevent an escalation” of violence in the region. [viii] Meanwhile, Sánchez’s pro-Palestinian government[ix]  in Spain has so far shown no interest in intervening in the situation. Although European countries claim to be united under a common European identity, the different strategic interests and foreign policy views of the member states make it almost impossible for the European Union to act in an effective and unified manner against global crises. This lack of political and military coordination is a significant obstacle to the EU’s desire to become a geopolitical superpower. As a matter of fact, the Red Sea crisis demonstrated the continued inability of European countries, both among themselves and with other Western countries, to act as a single entity in the face of international challenges.

In addition to these developments, the consequences of the Red Sea crisis for international trade will depend on the duration of the crisis. If the disruption of global supplies is long-term, productive sectors may find it difficult to resist. Due to disruptions in maritime trade through the Suez Canal, some ships had to transit through the Cape of Good Hope. Since circumnavigating Africa meant a 10-day transit delay, their arrival was slowed, and transportation costs increased. Moreover, the inability to transit through ports on the Suez Canal route could risk marginalizing the Mediterranean in maritime trade. If the crisis persists, maritime routes must be rescheduled, and Mediterranean ports risk becoming inactive. When all these factors add up, the global economy seems to be at an inflation risk.

In brief, the world is becoming increasingly globalized and, in parallel, more exposed to the impact of economic crises and political problems. This increasingly fragile system is continuously manifesting itself in different contexts. In other words, the fragility of the global economy is increasing. In the current political situation in the Red Sea, the civil war in Yemen since 2014 has intersected with the Gaza War. In the meantime, the United States, committed to protecting the global value of freedom of navigation, has focused on restoring maritime security in the Red Sea and the Bab al-Mandeb Strait.

The fact that there has been no reduction in Houthi attacks so far and that the Houthis have even declared that they will punish new Anglo-American attacks[x] signals that tensions in the region will escalate further in the coming days. Given the current political circumstances, it is clear that this crisis cannot be resolved through diplomatic means. In this context, European states need to play a more active role in this global crisis for strategic interests and to ensure security in the Red Sea, even if they do not want to increase regional tensions.


[i] “Yemen’s Houthi Rebels Seize Cargo Ship in Red Sea And Call Israeli Vessels ‘Legitimate Targets’”, The Guardian, https://www.theguardian.com/world/2023/nov/20/yemen-houthi-rebels-seize-cargo-ship-galaxy-leader-red-sea-israel (Accessed: 20.11.2023).

[ii] “Israel’s Eilat Port Sees 85% Drop-in Activity Amid Red Sea Houthi Attacks’”, Reuters, https://www.reuters.com/world/middle-east/israels-eilat-port-sees-85-drop-activity-amid-red-sea-houthi-attacks-2023-12-21/, (Accessed: 21.12.2023).

[iii] “‘Houthi Attacks and Drought Significantly Drive-Up Container Shipping Prices’”, Supply Chain Movement, https://www.supplychainmovement.com/houthi-attacks-and-drought-significantly-drive-up-container-shipping-prices/, (Accessed: 18.01.2024).

[iv] “‘Global Trade Falls Amid Houthi Attacks on Merchant Ships in Red Sea’”, The Guardian, https://www.theguardian.com/business/2024/jan/11/global-trade-falls-houthi-attacks-merchant-ships-red-sea, (Accessed: 11.01.2024).

[v] “‘Who Are the Houthi Rebels? What To Know About the Yemeni Militants Attacking Ships in The Red Sea’”, CBS News, https://www.cbsnews.com/news/who-are-houthi-rebels-what-to-know-yemen-militants-attack-ships-red-sea/, (Accessed: 12.01.2024).

[vi] “‘US And Britain Strike Yemen in Reprisal for Houthi Attacks on Shipping’”, Reuters, https://www.reuters.com/world/us-britain-carry-out-strikes-against-houthis-yemen-officials-2024-01-11/, (Accessed: 11.01.2024).

[vii] “‘Europe Split Over US, UK Strikes on Houthis in Yemen’”, Reuters, https://www.reuters.com/world/middle-east/italy-declined-take-part-military-action-against-houthis-source-says-2024-01-12/, (Accessed: 12.01.2024).

[viii] “‘Aid For Hostages, Civilians Enters Gaza as Israel Steps Up Strikes’”, France24, https://www.france24.com/en/middle-east/20240117-🔴-live-macron-says-france-did-not-join-strikes-on-houthis-to-avoid-escalation, (Accessed: 17.01.2024).

[ix] “‘In A Cautious EU, Spain Stands Out As Vocal Israel Critic’”, Le Monde, https://www.lemonde.fr/en/international/article/2023/11/27/in-a-cautious-eu-spain-stands-out-as-vocal-israel-critic_6293238_4.html, (Accessed: 27.11.2023).

[x] “‘Media, Nuovi Attacchi Usa-Gb Contro Houthi in Yemen’”, Swissinfo, https://www.swissinfo.ch/ita/media–nuovi-attacchi-usa-gb-contro-houthi-in-yemen/49150124, (Accessed: 23.01.2024).

Lal İLHAN
Lal İLHAN
Lal İlhan holds a Bachelor's degree in Political Science and International Relations from the University of Bologna with a thesis on the limits of cosmopolitanism. She received a Master's degree in Development and International Cooperation from Sapienza University of Rome with a thesis titled" Capitalism and Democracy: Undeniable Contradiction or Constructible Harmony." Lal is fluent in English and Italian, and her main research areas are the European Union, international organizations, and international development.

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