The Houthis have won the Red Sea

The bottom line

> Attacks on shipping in the Red Sea and Gulf of Aden continue with little respite, forcing away most merchant ships. Maritime traffic is low and Red Sea ports are suffering as a result.

> The Houthis are winning political acclaim in Yemen and across the Middle East, while the US and allies have proven unwilling and unable to safeguard their interests.

> Without an incentive for the Houthis to stop, this status quo is likely to last for the foreseeable future, even if a ceasefire is agreed in Gaza.

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As Hezbollah reels in Lebanon, the Houthis have won the Red Sea. Their attacks on shipping continue and most commerce between Europe and Asia remains diverted around Africa instead of passing through the Suez Canal. US and European navies have been unable to achieve their goals, while the Houthis have attained vast support at home and abroad. Little appears set to change.

Status quo

Missile, drone, and small boat attacks on merchant ships in the Red Sea mean business as usual, as the Iran-backed Houthi anti-shipping campaign continues. Despite Western efforts, there is little sign that the Houthis are being defeated or that their weapons stockpiles are being diminished in the long run.

As such, the Red Sea continues to be avoided by all but smaller ships with less valuable cargoes, since the costs of war risk insurance and the Suez Canal transit fee often exceed the extra fuel cost of sailing around the Cape of Good Hope on the tip of Africa. Indeed, maritime traffic through the Bab el Mandeb Strait at the southern entrance of the Red Sea is close to 60% lower than normal. Despite higher shipping costs, however, global supply chains have proven resilient, and there has been little discernible impact on global growth or inflation.

Meanwhile, Red Sea ports are suffering. Most dramatically, the Eilat port authority in Israel declared bankruptcy in July and Aqaba port in Jordan experienced a fall in container imports and exports of 20% and 29%, respectively, in the first quarter of 2024. Eilat had accounted for only 2% of Israel’s trade, but Aqaba is Jordan’s only seaport. The economic impact of this is hard to discern, however.

At the same time, the maritime effort to resist the Houthi anti-shipping campaign has lost momentum. Since the aircraft carrier Eisenhower and her escorts left the Red Sea in June with no replacement, the US-led operation Prosperity Guardian has stalled. The EU Aspides mission continues, but this is not sufficient: merchant ships continue to be hit by Houthi-launched missiles and drones.

Defeat for the West

Tactically, Western navies have had successes. American and European warships will be proud of their individual performances intercepting Houthi missiles and protecting merchant sailors, and morale is high.

Strategically, however, Western navies have been defeated: after over ten months of operations in the Red Sea, they have failed to re-establish freedom of navigation. The handful of warships that Western capitals are willing to send lack the capacity to provide security to the seventy-plus large vessels that normally seek to transit the Bab el Mandeb every day – and struggle even to protect the twenty or more that transit currently.

There is also no sign the Houthis are tiring or running out of weapons. US-UK strikes on the Houthis ashore, at least monthly since January, are having little tangible effect and are becoming less frequent. There has also been little sign of success in interdicting the stream of weapons delivered by Iran.

That some consider the Red Sea closed to US-, UK-, or Israel-linked merchant ships is deeply embarrassing for navies whose raison d’être is “keeping seas open and free.” For China and Iran, both of whom are pursuing different strategic objectives to the US in the global maritime domain, the prospect that closing sea lanes might be so easy will be very interesting.

 

Victory for the Houthis

Though the Houthis have a low accuracy rate with their missiles and drones, they have succeeded in forcing most international shipping away and are winning unprecedented political support.

At home, while their opponents fracture, the Houthis are more popular than ever. They have expanded their legitimacy in Yemen, gained support even beyond ethnic divides, and been flooded with new recruits who may have almost doubled their force since 2022. They have also won vast acclaim abroad: support has rushed in from across the region, where their action against Israel is praised in contrast to Arab governments criticised for inaction.

This success is leverage in their long-running talks for peace with Saudi Arabia. The attacks are certainly hurting the Kingdom: Saudi-owned and -flagged ships are being targeted and the Port of Jeddah on the Red Sea will be suffering. Indeed, the Saudis have already conceded to some Houthi demands.

 

What’s next

The Houthis

September was quiet, but so too was May, which preceded the worst month for serious attacks on shipping so far. It is possible that the current lull comes as the Houthis prepare for a new offensive in the Red Sea. War in Lebanon may well be the signal to start – last night, two vessels were hit by missiles and drones

Indeed, the Houthis are gaining much and seem able to continue indefinitely; they might even soon be furnished with modern Russian missiles. Though the war in Gaza is ostensibly why they are attacking merchant shipping, they have little incentive to stop even after a ceasefire; it will be easy to find an excuse to continue.

However, as re-engagement between Iran and the West emerges as a possibility, there is a distant chance that the Houthis are instructed to stop their attacks. Alternatively, they might be asked to ramp up their attacks to improve the hand of negotiators. Given their reliance on Iran, they would comply with either order.

Israeli strikes on the Houthis – over the past weekend and in July – are unlikely to change much. The strikes themselves are limited in scope and are unlikely to be any more effective than the US-UK strikes unless Israel has better intelligence on the Houthis.

The Houthis will not fundamentally change their approach from attacks in the Red Sea to more direct attacks on Israel. They will be wary of incurring the same wrath that has been unleashed on Hezbollah over the past week; Israel also has strong air defence and much of the Houthi arsenal will not have the necessary range. The group will continue to launch symbolic strikes against Israel to show intent but will calculate that they gain more from continuing their maritime campaign.

 

Iran

Iran, too, has benefitted from the Houthis’ victory. It will be more willing to supply and support the group, and its control over the Houthis will be useful leverage in any future nuclear talks with the international community.

Iran will be encouraged by the demonstration of how easy it is to close maritime chokepoints and emboldened by the apparently limited resolve of the West. The option to close the Strait of Hormuz will be even more attractive in any future war with the US.

Domestically, the Islamic Revolutionary Guard Corps (IRGC) will be politically strengthened by the work of their Houthi clients. It is not ideal for the moderate President Masoud Pezeshkian at a critical early stage of his administration.

 

The West

There is little the US and its European allies can do to overturn the Houthi victory. A diplomatic solution is improbable: the West has been unable to rein in Israeli action and a deal with Iran appears distant. A military solution would rely on forces that the West is not willing to commit: a defensive convoy system would require many more warships and an offensive campaign on the ground in Yemen is unthinkable.

At the same time, the status quo is liveable. As long as shipping companies are happy to route their vessels the long way around Africa, and the cost of doing so is relatively low (enduringly low oil prices certainly help), there is little practical reason to commit resources to defeating the Houthis.

It appears the Houthi victory is being accepted as an immutable reality. Western capitals will be under pressure to demonstrate that they have not abandoned the Red Sea, and warships will continue to occasionally sortie to escort their own military shipping, give experience to crews, or test equipment and practices, but little else.

This comes with its own risks: intercepting missiles is a game of probability, and a Western warship will be hit if the attacks continue forever. The cost of attrition will also be concerning navies with limited stocks of expensive weapons and tiring crews. Their hope will be that the Houthis lose interest as the conflict in Gaza winds down.

 

International Shipping

The status quo will remain for as long as the Houthis and Iran wish. That shipping is going the long way around Africa is a matter of economics – only when the missiles stop flying will the insurance costs of the route through the Red Sea and Suez Canal fall enough to see merchant ships return.

International commerce and Western navies have been forced to accept a new normal, and there are few signs of change coming soon.

That is not likely to be anytime soon.