International Monetary Fund: Houthi Attacks Have Reduced Traffic Through the Red Sea by 30 Percent

The International Monetary Fund announced that with the continued attacks by the Houthi group in Yemen, commercial shipping through the Red Sea has decreased by one-third this year. Following these attacks, supported by the Islamic Republic, commercial ships have been forced to take longer and more expensive routes by circumventing the African continent. Jihad Azour, director of the Middle East and Central Asia department of the IMF, said on Wednesday, February 1, that "container transport has decreased by nearly 30 percent, and the trend of declining trade has accelerated since the beginning of this year." The U.S. Department of Defense (Pentagon) announced on Tuesday, January 30, that the Houthis have attacked commercial and military ships more than 30 times since November 20. This group claims its attacks are in solidarity with the Palestinians and in protest against Israel's attacks on Gaza. Statistics from the "Port Watch" affiliated with the IMF show that the total volume of maritime transport through the Suez Canal has decreased by 37 percent from January 1 to January 16 compared to the same period last year. The Suez Canal connects the Red Sea to the Mediterranean Sea and is the shortest and most cost-effective maritime trade route from South Asia to Europe. The Red Sea is particularly vital for European countries, with nearly 12 percent of global trade passing through this critical route. However, according to the International Chamber of Shipping, Houthi attacks have caused some shipping companies to choose alternative routes, bypassing the African continent. Azour stated in an online meeting with reporters that the level of uncertainty is very high, and regional developments will determine the extent of changes in trade patterns in terms of volume and sustainability. He also raised the question: "Are we on the brink of a major change in trade routes? Or is this a temporary situation due to rising costs and worsening security expenses?" The United States leads a coalition to protect shipping in the Red Sea and is seeking to apply diplomatic and financial pressure on the Houthis by re-designating them as a terrorist group. The European Union stated last week that maritime traffic through the Red Sea shipping route has decreased by 22 percent due to rebel attacks over the past month. The EU is working to launch its own maritime mission in the Red Sea to help protect international shipping. EU member states have supported this plan, which is expected to be finalized at a meeting of the foreign ministers of this body on February 18. The United States and the United Kingdom have conducted attacks against the Houthis in Yemen, but this group, supported by the Islamic Republic, continues to target ships. The Houthi attacks and the ongoing war in Gaza occur at a time when the IMF has projected the economic growth of Middle Eastern and North African countries to be less than 3 percent this year, reflecting a half-percent decrease from its October forecast. Azour noted that the economic recession in the West Bank and the war-torn Gaza Strip is "very severe," with a decline to about negative six percent, indicating a 9 percent decrease from the October outlook. He stated, "We expect that if hostilities do not cease immediately and rapid reconstruction does not take place, Gaza's economy will remain in a contraction this year." The Chairman of the Joint Chiefs of Staff of the U.S. stated that the U.S. goal in the Red Sea is solely to deter the Houthis and not to escalate tensions. Denmark is joining the U.S.-led coalition in the Red Sea. Commercial companies are concerned about the consequences of continued tensions in the Red Sea. A British warship destroyed a Houthi drone supported by the Islamic Republic. Houthi attacks on ships continue, with reports of two missiles exploding near the port of Aden. CENTCOM reported that an American destroyer intercepted a missile launched by the Houthis. A significant deployment of Indian naval ships is taking place near the Red Sea to combat piracy. Reuters reported a warning from China to the Islamic Republic: either contain the Houthis or risk damaging relations with Beijing.