Suez Crisis Deja Vu

Yemen’s Houthi rebels have rerouted Red Sea trade, cool receptions to Egyptian peace proposal, 90 Palestinians killed in Israeli airstrikes.

KimEng SENG

Lach Paovin (MA Vin)

, and

Dr. Digby James Wren

Dec 28, 2023

UPDATE: The current crisis in the Middle East has laid bare something that had long been hidden: namely, a serious military and diplomatic crisis for the United States.

The American empire’s raison d'être is the safeguarding of international trade. Rather than holding an empire of conquest, Washington limited its military footprint to a vast array of bases around the globe, and it derived much of its power from controlling various international institutions necessary for economic integration and industrial prosperity. Like Britain before it, America has always been a sea-based and commercial empire, rather than a land-based power like Prussia.

The attacks on commercial ships in the Red Sea by Yemen’s Houthi rebels have rerouted a majority of global trade away from the crucial maritime artery for consumer goods and energy supplies, a shift expected to trigger delays and rising prices.

Israel and Hamas on Monday gave cool public receptions to an Egyptian proposal to end their bitter war. But the longstanding enemies stopped short of rejecting the plan altogether, raising the possibility of a new round of diplomacy to halt a devastating Israeli offensive in the Gaza Strip.

More than 90 Palestinians, including dozens from an extended family, were killed in Israeli airstrikes on two homes in Gaza, rescuers and hospital officials said Saturday, a day after the U.N. chief warned that nowhere is safe in the territory and that Israel’s offensive creates “massive obstacles” to distribution of humanitarian aid.

How Houthi attacks affect global trade

By Courtney Bonnell

Oil, natural gas, grain and everything from toys to electronics typically travel through the waterway separating Africa and the Arabian Peninsula en route to the Suez Canal, where 12% of the world’s trade passes.

Some of the world’s largest container shipping companies and oil giant BP are sending vessels on longer journeys that bypass the Red Sea. In response to the growing impact to global trade, the U.S. and a host of other nations have created a new force to protect ships.

Here are things to know about the recent attacks and the impact on global shipping:

WHY ARE HOUTHIS ATTACKING SHIPS?

The Houthis are Iranian-backed rebels who seized Yemen’s capital, Sanaa, in 2014, launching a grinding war against a Saudi-led coalition seeking to restore the government.

The Houthis have sporadically targeted ships in the region, but the attacks have increased since the start of the Israel-Hamas war. They have used drones and anti-ship missiles to attack vessels and in one case used a helicopter to board and seize an Israeli-owned ship and its crew.

They have threatened to attack any vessel they believe is either going to or coming from Israel. That’s now escalated to apparently any vessel, with container ships and oil tankers flagged to countries like Norway and Liberia being attacked or drawing missile fire.

The Houthis also have hailed vessels by radio to try to convince them to change course closer to the territory they control.

WHY IS THE RED SEA IMPORTANT?

The Red Sea has the Suez Canal at its northern end and the narrow Bab el- Mandeb Strait at the southern end leading into the Gulf of Aden. It’s a busy waterway with ships traversing the Suez Canal to bring goods between Asia and Europe and beyond.

In fact, 40% of Asia-Europe trade normally goes through the area, including a huge amount of energy supplies like oil and diesel fuel for import-dependent Europe, said John Stawpert, senior manager of environment and trade for the International Chamber of Shipping, which represents 80% of the world’s commercial fleet.

So do food products like palm oil and grain and anything else brought over on container ships, which is most of the world’s manufactured products. So do food products like palm oil and grain and anything else brought over on container ships, which is most of the world’s manufactured products.

In all, about 30% of global container traffic and more than 1 million barrels of crude oil per day typically head through the Suez Canal, according to global freight booking platform Freightos Group.

HOW ARE HOUTHI ATTACKS AFFECTING TRADE?

Huge shipping container companies MSC, Maersk, CMA CGM Group and Hapag-Lloyd, among others, are avoiding the Red Sea and sending their ships around Africa and the Cape of Good Hope. That adds what analysts say could be a week to two weeks to voyages.

Shippers amounting to 62% of global capacity are opting for the longer route, according to Freightos. That’s lead the number of vessels moving through the Red Sea to drop by more than 40% in a week, said Project44, a tech company whose platform helps companies track shipments.

London-based BP also that it has “decided to temporarily pause all transits through the Red Sea,” including shipments of oil, liquid natural gas and other energy supplies.

Depending on what companies decide to do, they will have to add more ships to make up the extra time or burn more fuel for the longer journey and if they decide to go faster to meet their itineraries — both of which would release more climate-changing carbon dioxide, said Simon Heaney, senior manager of container research for Drewry, a maritime research consultancy.

“The impact will be longer transit times, more fuel spent, more ships required, potential disruption and delays — at least in the first arrivals in Europe,” he said.

That brings up the cost of shipping, but “I don’t think it’s going to go to the heights that it reached during the pandemic,” Heaney said.

Supply chain disruptions increased as people stuck at home during the COVID-19 pandemic ramped up orders for all sorts of products, driving up consumer prices worldwide. Stawpert of the shipping chamber said he would expect to see some price increases for consumers in the short term but that it depends how long the security threat lasts.

Project44 foresees higher gasoline prices because if the conflict drags on, a “major disruption to oil is anticipated” and that would push up the cost of crude. Oil prices already have been rising. The company also expects products could be missing from store shelves after the busy holiday shopping season, with new shipments taking longer to arrive.

However, “one saving grace may be the timing, as December and early January are typically slow, post-holiday season times for ocean freight,” Judah Levine, head of research for Freightos, said in a blog post.

HOW IS THE US ALLIANCE RESPONDING?

U.S. Defense Secretary Lloyd Austin announced a security initiative to protect ships in the Red Sea that includes United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain.

Some of those countries will conduct joint patrols while others provide intelligence support in the southern Red Sea and the nearby Gulf of Aden, Austin said. The goal is to provide ships and other assets to help protect trade in the area.

It builds on the existing presence of U.S. and other coalition warships that patrol to keep the waterway open. The Houthis have no formal naval warships to use to impose a cordon, relying on harassing fire and only one helicopter-borne assault so far.

Meanwhile, ships are still moving through the Red Sea, though insurance costs have doubled, which can add hundreds of thousands of dollars to a journey for the most expensive ships, said David Osler, insurance editor for Lloyd’s List Intelligence, which provides analysis for the global maritime industry.

Cool reception for Egyptian peace plan

By Samy Mandy, Najib Jobain and Josef Federman (amended)

The Egyptian plan calls for a phased hostage release and the formation of a Palestinian government of experts to administer the Gaza Strip and occupied West Bank, according to a senior Egyptian official and a European diplomat familiar with the proposal.

The Egyptian official, speaking on condition of anonymity to discuss the proposal, said the details were worked out with the Gulf nation of Qatar and presented to Israel, Hamas, the United States and European governments. Egypt and Qatar both mediate between Israel and Hamas, while the U.S. is Israel’s closest ally and a key power in the region.

Israeli Prime Minister Benjamin Netanyahu did not comment directly on the proposal. But speaking to members of his Likud Party, he said he was determined to press ahead with Israel’s offensive, launched in response to an Oct. 7 Hamas attack on southern Israel that killed 1,200 people and took 240 others hostage.

ISRAEL-HAMAS WAR

“We are expanding the fight in the coming days and this will be a long battle and it isn’t close to finished,” he said.

Hamas has continued to fire rockets into Israel throughout the fighting. Late Monday, it launched a barrage of rockets, triggering air raid sirens in the southern city of Ashkelon. AP video showed what appeared to be several interceptions by Israel’s rocket defense system. There were no immediate reports of damage or injuries.

The Egyptian proposal falls short of Israel’s declared goal of crushing Hamas. It also appears to be at odds with Israel’s insistence on maintaining military control over Gaza for an extended period after the war.

But Netanyahu faces heavy domestic pressure to reach a deal to bring home the more than 100 Israeli hostages who remain in captivity in Gaza.

As he vowed to continue the war during a speech in parliament, relatives of the hostages interrupted him and called for their immediate return. “Now! Now!” they shouted.

The rising death toll of Israeli soldiers from the ground operation also threatens to undermine public support for the war. The Israeli military announced the deaths of two more soldiers Monday, bringing the total killed in the war to 156.

Netanyahu’s War Cabinet was expected to meet late Monday. It was unclear if they would discuss the Egyptian proposal.

Hamas did not officially react to the proposal. But it is unclear if Hamas would agree to relinquish power after controlling Gaza for the past 16 years.

Izzat Rishq, a senior Hamas official who is believed to be based in Qatar, issued a statement repeating the group’s position that it will not negotiate without a “complete end to the aggression.” He said Hamas would not agree to a “temporary or partial truce for a short period of time.”

Word of the proposal came as Israeli airstrikes heavily pounded central and southern Gaza.

In the Maghazi refugee camp Monday, rescue workers were still pulling bodies from the wreckage of a strike the previous night. Records at the nearby Al-Aqsa Hospital seen by The Associated Press showed at least 106 people killed, making it one of the deadliest strikes of Israel’s air campaign.

The United Nations’ World Health Organization visited the hospital on Monday, Director-General Tedros Adhanom Ghebreyesus said.

“The hospital is taking in far more patients than its bed capacity and staff can handle. Many will not survive the wait,” he said in a post on X, formerly Twitter.

The war has devastated large parts of Gaza, killed more than 20,600 Palestinians and displaced almost all of the territory’s 2.3 million people.

U.N. officials have warned that a quarter of the population is starving under Israel’s siege of the territory, which allows in only a trickle of supplies.

In the southern Gaza Strip, Hamas admitted to shooting dead a 13-year-old boy who was among a group of people who tried to seize aid from a truck. The shooting prompted a violent protest and rare public criticism of Hamas.

EGYPTIAN PROPOSAL

The Egyptian proposal is an ambitious bid not only to end the war but also to lay out a plan for the day after.

It calls for an initial cease-fire of up to two weeks during which Palestinian militants would free 40 to 50 hostages, among them women, the sick and the elderly, in return for the release of 120-150 Palestinians from Israeli prisons, the Egyptian official said.

At the same time, negotiations would continue on extending the cease-fire and the release of more hostages and bodies held by Palestinian militants, he said. Israeli officials estimate that 20 of the hostages have died or been killed in captivity.

Egypt and Qatar would also work with all Palestinian factions, including Hamas and the rival, internationally recognized Palestinian Authority, to agree on the establishment of a government of experts, he said.

The government would rule Gaza and the West Bank for a transitional period as Palestinian factions work toward presidential and parliamentary elections, he added.

In the meantime, Israel and Hamas would negotiate a comprehensive “all- for-all” deal, he said. This would include the release of all remaining hostages in return for all Palestinian prisoners in Israel, as well as the Israeli military’s withdrawal from Gaza and the Palestinian militants’ halting of rocket attacks into Israel.

More than 8,000 Palestinians are held by Israel on security-related charges or convictions, according to Palestinian figures. Some have been convicted in deadly attacks on Israelis. While their release would be controversial, Israel has a history of agreeing to lopsided releases.

Egyptian Foreign Minister Sameh Shoukry spoke by phone Monday with Iran’s chief diplomat, Hossein Amirabdollahian, on the war in Gaza, the Egyptian Foreign Ministry said. The statement said Shoukry discussed efforts to achieve a comprehensive cease-fire. It didn’t offer further details. Iran is a major supporter of Hamas.

In Washington, the White House declined to comment about the Egyptian proposal.

U.S. officials remain in close contact with Egypt and Qatar about getting more hostages released and several proposals have been floated, according to a person familiar with the talks. While the Egyptian proposal is viewed as a positive sign, the U.S. is skeptical it will result in a breakthrough, the person said, speaking on condition of anonymity to discuss behind the scenes diplomacy.

INSIDE GAZA

Israel’s offensive has been one of the most devastating military campaigns in recent history. More than two-thirds of the 20,674 Palestinians killed have been women and children, according to the Health Ministry in Gaza, which does not differentiate between civilians and combatants among the dead.

The offensive has led to a humanitarian crisis in Gaza, with shortages of food, medicines and other basic supplies.

With aid shipments limited, crowds have tried to seize some of the goods coming in on trucks. Hamas gunmen have been seen on top of some of the vehicles. The group says it is protecting the shipments, while Israel accuses it of stealing aid.

In the southern Gaza Strip, Hamas acknowledged that a policeman with the Hamas-run Interior Ministry shot dead a 13-year-old boy, saying the shots were fired when a group of people tried to seize aid from a truck near the city of Rafah on Sunday, an official with Hamas government media office said Monday.

The shooting prompted a violent protest and rare public criticism of Hamas, which has shown little tolerance for dissent during its rule.

Enraged relatives of the slain boy, Ahmed Brikeh, attempted to attack a police station, burning tires and demanding the policeman be held accountable.

A relative, Mosaad Brikeh, blamed Hamas for the killing in video comments circulated on social media, accusing the policeman of shooting the boy “directly in his head.”

He said the family has previously cooperated with Hamas to secure the border area with Egypt. He called for the policeman to be held accountable, warning the family would prevent “any vehicles” from passing through the area.

The devastation of the war over the past weeks has brought sporadic eruptions of anger against Hamas, something that has previously been unthinkable during the group’s 16-year rule over Gaza.

Israel faces international criticism for the civilian death toll. It blames Hamas, citing the militants’ use of crowded residential areas and tunnels. Israel says it has killed thousands of Hamas militants, without presenting evidence.

Late on Monday, the Israeli army said it had discovered the stolen car of the family of an Israeli hostage, Samer Al-Talalka, in a hospital compound in northern Gaza. Al-Talalka was among three hostages mistakenly shot dead by Israeli soldiers in Gaza earlier this month.

The army said grenade fragments and bloodstains of another hostage were found in the vehicle. “The finding of the vehicle directly links the hospital to the brutal events of Oct. 7,” it said.

CHRISTMAS AMID WAR

Dozens of members of Gaza’s tiny Christian community held a Christmas Eve service in the Holy Family Church in Gaza City, which they have also used as a shelter. Last week, Catholic officials said that two Christian women were killed by Israeli sniper fire at the compound.

“This is not a feast,” said Kamal Ayad, whose wife and daughter were killed in the shooting. “This is a feast of pain for the Palestinian people.”

He said his only wish was for “peace and hope for a cease-fire.”

The service was held late Sunday, but details only emerged on Monday due to frequent internet outages.

Bethlehem was hushed for Christmas, its holiday celebrations called off.

Israeli strikes kill over 90 Palestinians

Biden says he didn’t request a cease-fire

By Najib Jobain and Samy Magdy

U.S. President Joe Biden spoke with Israeli Prime Minister Benjamin Netanyahu on Saturday, calling it a long and private conversation a day after the Biden administration again shielded Israel in the diplomatic arena. On Friday, the U.N. Security Council adopted a watered-down resolution that calls for immediately speeding up aid deliveries to desperate civilians in Gaza, but not for a cease-fire.

“I did not ask for a cease-fire,” Biden said of the call. Netanyahu’s office said the prime minister “made clear that Israel would continue the war until achieving all its goals.”

Also Saturday, the Israeli military said troops arrested hundreds of alleged militants in Gaza over the past week and transferred more than 200 to Israel for further interrogation, providing rare details on a controversial policy of mass roundups of Palestinian men. The army said more than 700 people with alleged ties to the militant groups Hamas and Islamic Jihad have so far been sent to Israeli lockups.

Israel declared war after Hamas gunmen stormed across the border on Oct. 7, killing some 1,200 people and taking some 240 hostages. More than 20,000 Palestinians have been killed in Israel’s war to destroy Hamas and more than 53,000 have been wounded, according to health officials in Gaza, a besieged territory ruled by the Islamic militant group for the past 16 years.

The Health Ministry in Gaza on Saturday evening said 201 people had been killed over the past 24 hours.

Airstrikes on Friday flattened two homes, including one in Gaza City, where 76 people from the al-Mughrabi family were killed, making the attack one of the deadliest of the war, said Mahmoud Bassal, a spokesman for Gaza’s Civil Defense department.

Among those killed were Issam al-Mughrabi, a veteran employee of the U.N. Development Program, his wife, and their five children.

“The U.N. and civilians in Gaza are not a target,” said Achim Steiner, the head of the agency. “This war must end.”

And a strike pulverized the home of Mohammed Khalifa, a local TV journalist, killing him and at least 14 others in the urban refugee camp of Nuseirat, according to officials at the Al Aqsa Martyrs’ Hospital where the bodies were taken.

Israel blames Hamas for the high civilian death toll, citing the militants’ use of crowded residential areas and tunnels. Israel has launched thousands of airstrikes since Oct. 7, and has largely refrained from commenting on specific attacks.

Israel’s offensive has been one of the most devastating military campaigns in recent history, displacing nearly 85% of Gaza’s 2.3 million people and leveling wide swaths of the tiny coastal enclave. More than a half million people in Gaza — a quarter of the population — are starving, according to a report this week from the United Nations and other agencies.

In the southern city of Khan Younis, men walking through the rubble tried to shoo away cats feeding on unclaimed bodies. One man covered a body with a blanket. Another wished to call an ambulance but had no phone signal.

The Israeli military spokesman, Rear Adm. Daniel Hagari, said forces were expanding their offensive in northern and southern Gaza and troops were fighting in “complex areas” in Khan Younis.

The army’s statement on detentions followed earlier Palestinian reports of large-scale roundups of teenage boys and men from homes, shelters and hospitals in northern Gaza where troops have established firmer control. Some of the released detainees have said they were stripped to their underwear, beaten and held for days with minimal water.

Channel 13 in Israel showed new footage of Palestinian men stripped to their underwear and walking in single file, with soldiers nearby. It was not clear when the footage was taken. In response to widespread criticism, the army has said detainees are stripped to check them for weapons. It has denied abuse allegations and said those without links to militants are quickly released.

Hamas called on the International Committee of the Red Cross and other organizations to pressure Israeli authorities to reveal the whereabouts and conditions of people detained.

Israel says it has killed thousands of Hamas militants, including about 2,000 in the past three weeks, but has not presented evidence. It says 144 of its soldiers have been killed in the ground offensive.

Following the U.N. resolution, it was not immediately clear how and when aid deliveries would accelerate. Trucks enter through two crossings — Rafah on the border with Egypt and Kerem Shalom on the border with Israel. On Friday, fewer than 100 trucks entered, the U.N. said — far below the daily average of 500 before the war.

Both crossings were closed Saturday by mutual agreement among Israel, Egypt and the U.N., Israeli officials said.

Senior Hamas official Osama Hamdan criticized the Security Council resolution that called for aid into Gaza without suspending hostilities, calling it “weak” and “insufficient.”

Ahead of the council vote, the U.S. negotiated the removal of language that would have given the U.N. authority to inspect aid going into Gaza, something Israel says it must continue to do itself to ensure material does not reach Hamas.

U.N. Secretary-General Antonio Guterres said Friday that it’s a mistake to measure the effectiveness of the humanitarian operation by the number of trucks.

“The real problem is that the way Israel is conducting this offensive is creating massive obstacles to the distribution of humanitarian aid inside Gaza,” he said.

Netanyahu and his government also faced pressure at home, with calls to get the remaining hostages freed. “Bibi, Bibi retire. We don’t want you anymore,” a crowd of thousands chanted in Tel Aviv.

Long Mekong

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