GEOPOLITICS: THE RED SEA
The Red Sea is now being affected more than usual by geopolitics. Yemen (pop. 33 million), mostly under the control of Houthis, pro-Iranian Shia rebels, is bombarding shipping in the Red Sea in solidarity with Palestinians in Gaza. The US and other Western warships are intercepting Houthi drones and missiles. Four out of the five largest shipping companies in the world--France’s CMA/CGM, Germany’s Hapag/Lloyd, Denmark’s Maersk, Italy’s MSC--have now halted passages in the Red Sea in response to the threats to their shipping, as has BP British Petroleum. Insurance and shipping rates have soared. Egypt is worried because it depends on revenue from the Suez Canal at the north end of the Red Sea: the canal generates $9.4 billion for Egypt per year. The West hopes China will get Iran to rein in the Houthis, as China is the largest buyer of Iranian oil. The Saudis are concerned because they have been trying to withdraw from Yemen, where they have been active in a proxy war opposing the Houthis. Yemen imports 80% of its food and the shipping problem is raising the cost of feeding its people.
From this brief sketch one can see how a war can have ripple effects in a strategic corner of the world. One can also understand more fully why many want the destruction currently being inflicted on Gaza to stop.
Source: The Economist, 12/23/23