Rise in Somali piracy amid Western focus on Houthi attacks disrupts global trade

A Western coalition led by the USA and the UK has made unsuccessful attempts to mitigate the crisis in the Red Sea. Houthi rebels from Yemen persist in assaulting commercial vessels, severely disrupting trade along the crucial route that encompasses the Red Sea and the Suez Canal. They claim to be pressuring the extreme right-wing government of Benjamin Netanyahu in Tel Aviv, demanding that Israel cease warfare in the Gaza Strip, a supposed answer to Hamas's attack in October.

The US and British forces reportedly struck 36 Houthi targets in Yemen over the weekend. However, the rebels have already declared that they will not capitulate. Meanwhile, it appears that the Western concentration on Yemeni combatants is inadvertently benefiting Somali pirates.

The International Maritime Bureau reports that in December 2023, Somali pirates hijacked their first freighter in six years, and their incursions have not ceased. Data from the European Union's Maritime Forces indicate additional attempts since then, and this week, the British Royal Navy issued a caution for shipping due to pirate movements in the Indian Ocean - according to Bloomberg.

Pirate attacks take place in the Indian Ocean, not in the Red Sea, and they occur either before or after the Bab al-Mandab Strait, depending on the direction of travel. As Bloomberg reports, the ships are seized for ransom, often amounting to millions of dollars.

The UK's maritime trade unit, which acts as a liaison between the British Royal Navy and commercial vessels, warned this week that two alleged pirate groups are active in the Indian Ocean. This came after a freighter's guards engaged in a firefight with a small boat approximately 746 miles southeast of Oman over the weekend, far from where Houthi attacks have been taking place - the agency reports.

Somali piracy isn't recent, with about 200 ship attacks occurring annually between 2009 and 2011. The issue was resolved mainly by placing armed guards aboard ships, but now, the Somali maritime agency warns that attacks have escalated due to the Western navies' focus on Houthis.

Rising delivery times and costs are already influencing the oil market. The Houthi attack on a tanker carrying Russian crude demonstrated that no one is secure in the Red Sea, despite previous assurances that Russian and Chinese cargoes were not at risk.

Bloomberg reports that global oil markets are doing all they can to avoid the Red Sea, an essential route for Middle Eastern exporters, including Saudi Arabia. They are now favoring nearer local producers.

Experts highlight an informal division of the world into two trade regions: with the Atlantic Ocean and Indian Ocean at their cores. For instance, Europe relies more on supplies from Guyana on the east coast of South America and the North Sea.

This disruption in the Red Sea trade isn't primarily affecting the West. In an attempt to placate the Houthi rebels, who are informally supported by Iran, China is among those appealing to Tehran, given the Suez Canal's strategic significance to trade with Europe. Major obstacles are also affecting Indian rice exporters, amongst others.

Egypt, which charges for using the Suez Canal, also suffers losses. For Cairo, it's one of the two primary sources of hard currency, alongside tourism. At the moment, it's significantly depleted.

In January 2024, infrastructure revenue was almost half what it was at the beginning of 2023. Last month, it amounted to roughly $428 million, compared to $804 million during the same period in 2023. The number of ships serviced decreased by 36 percent.

"This is the first time the Suez Canal has faced such a crisis. Until now, we considered every subsequent month and year to be better," said the head of the Suez Canal Authority, Osama Rabie, as quoted by Bloomberg.