On Thursday, sanctions were imposed on four top Houthi leaders in Yemen by the United States and the United Kingdom. The attacks on commercial vessels in the Red Sea by the Iran-backed rebel group have escalated.’
Sanctions have been levied against many high-ranking Houthi officials, including the defense minister, the head of the coastal defense forces, the commander of the Houthi naval forces, and the director of procurement for the Houthi forces, Muhammad Ahmad al-Talibi.
After three years of removal, the Houthis were re-listed as a terrorist group earlier this January by the Biden administration. The group’s assaults on commercial ships in the Red Sea and Suez Canal, a vital point for international trade, led to the new moniker.
Shipping prices have spiked, and global trade routes have been clogged as a result of the assaults, which have persisted even after the United States and the United Kingdom launched combined missile strikes on the group. This has fueled worries of a return of inflation at a time when internal pricing pressures are finally beginning to ease.
As the United States has increased its reaction to the assaults, oil prices have risen since the beginning of the new year.
The Suez Canal is used by around 15% of the world’s ships and is responsible for 30% of the world’s container commerce. On the other hand, many ships are taking the circuitous route around Africa, around the Cape of Good Hope, to evade pirates and protect their cargo.
Routing ships around Africa adds 2.5 weeks to the voyage duration, which, according to UBS’s calculations, lowers the adequate capacity of an Asia-Europe voyage by roughly 25%.
In a report published earlier this month, analysts from Bank of America expressed concern that the suspension of the Panama Canal, the Suez Canal, and the Red Sea might potentially postpone the recent decreases in inflation.
According to U.S. sources, two ships flying the American flag and transporting goods for the U.S. Defense and State departments were attacked by Houthi rebels as recently as Wednesday. The U.S. Navy managed to divert part of the enemy fire.
The United States and the United Kingdom have fired multiple rounds of airstrikes to halt the attacks.
