Second shipping chokepoint threat

The Bab el-Mandeb Strait, a narrow waterway connecting the Red Sea to the Gulf of Aden, is emerging as a critical flashpoint in global shipping security alongside the Strait of Hormuz, with Iran’s allies signaling potential closure of this vital route. Located at the southern entrance to the Red Sea, the Bab el-Mandeb—often called the “Gate of Tears” due to its historical perils—handles roughly 10% of the world’s seaborne oil trade and a significant portion of container traffic between Europe and Asia. A simultaneous shutdown of both straits, as threatened, could cripple global trade, forcing ships to detour around Africa’s Cape of Good Hope, adding weeks and millions in costs to journeys. (theconversation.com) The escalating tensions are tied to Iran’s strategic influence over proxy groups like the Houthis in Yemen, who have already disrupted shipping in the Red Sea with drone and missile attacks since late 2023, often targeting vessels linked to Israel or Western nations amid the Gaza conflict. European officials report that Iran is now urging the Houthis to intensify these attacks, particularly if the U.S. or its allies escalate military actions in the region. This comes as Iran also maintains leverage over the Strait of Hormuz, through which about 20% of global oil passes, creating a dual threat to energy and trade security. (bloomberg.com) The economic fallout is already visible, with insurance premiums for ships transiting the Red Sea soaring from approximately 0.6% to as high as 2% of cargo value in recent months. This sharp increase reflects the heightened risk perceived by insurers, as attacks have damaged vessels and forced rerouting. For context, a 2% premium on a $100 million cargo translates to $2 million per trip, a cost often passed on to consumers through higher prices for goods and fuel. Shipping companies are also grappling with crew safety concerns, with some refusing to sail through the area without naval escorts. (news.sky.com) Western naval forces, including the U.S. and European Union, have deployed warships under initiatives like Operation Prosperity Guardian to secure the Bab el-Mandeb and deter Houthi attacks, but these efforts have not fully restored confidence in the route’s safety. While some attacks have been intercepted, the persistent threat of missiles and drones has kept the region on edge. The U.K., heavily reliant on Red Sea trade for goods and energy, has warned that a prolonged disruption could have a “clear and significant impact” on its economy, prompting calls for stronger international coordination. (news.sky.com) Looking ahead, the situation remains volatile as diplomatic efforts to de-escalate tensions with Iran and its proxies face significant hurdles. Analysts suggest that any U.S. military escalation—such as strikes on Houthi targets or Iranian assets—could trigger retaliatory closures of one or both straits, with catastrophic effects on global markets. Meanwhile, the International Maritime Organization is urging member states to bolster naval patrols and share intelligence, though resources are stretched thin. The coming weeks will be critical in determining whether negotiations or deterrence can avert a full-blown crisis. (theconversation.com) The broader geopolitical context adds another layer of complexity, as Iran’s actions are partly driven by its desire to counter Western sanctions and assert regional dominance. With the Houthis as a willing partner, Iran can project power without direct confrontation, exploiting chokepoints like Bab el-Mandeb to pressure global powers. As energy prices remain sensitive to Middle Eastern instability, a sustained threat to these straits could push oil above $100 per barrel, a threshold not consistently crossed since 2022, further straining economies worldwide. (bloomberg.com)