Tom Ordeman, Jr.
In the opening days of 2024, events in the Red Sea provide an object lesson in the consequences of what many would characterize as a weak or ill-advised foreign policy.
On October 7th, 2023, Hamas and Palestinian Islamic Jihad (PIJ), two terrorist organizations based in the Gaza Strip, breached a fortified border and attacked Israeli civilians. More than a thousand Israelis were killed, and several hundred were taken back to Gaza as hostages. Both Hamas and PIJ receive the bulk of their financial and operational support from the Islamic Republic of Iran, which is widely recognized as the leading sponsor of international terrorism.
Of course, blame for the October 7th attack, and subsequent efforts by Hamas and PIJ to exact a toll on Israel, falls entirely upon those groups and their sponsors. However, since Russia's February 2022 invasion of Ukraine, the Biden Administration's critics have suggested that America's failed campaign in, and botched withdrawal from, Afghanistan, and President Biden's own long-term foreign policy record, emboldened American enemies around the world. By October, domestic political pressure against a "blank check for Ukraine" was also ongoing, caused in no small part by Biden's failure to build bi-partisan consensus for his foreign policy.
In September, mere weeks before the October 7th attack, the Biden Administration arranged to unfreeze $6 billion in Iranian assets held in South Korean banks as part of a controversial prisoner swap. The Biden Administration claims that negotiations involved safeguards to ensure that the money could only be used for humanitarian purposes, but at very best, this merely frees up additional funds from Iran's budget for Tehran's sustained support to terrorist groups in Gaza and elsewhere. This has been evidenced by flare-ups on Israel's northern border, where Lebanese Hezbollah - itself a subsidiary of the Iranian Revolutionary Guards Corps' infamous Quds Force - has launched multiple rocket attacks. This has triggered Israeli concerns that Hezbollah could attempt to cross the border and attempt a repeat of the Hamas/PIJ incursion. At the end of November, in a rare instance of bi-partisan cooperation, Democrats and Republicans in Congress passed a measure to freeze the $6 billion in Qatari banks, days after the Biden Administration released another $10 billion to Iran.
Of course, following the Trump Administration's 2018 decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) - the infamous "Iran nuclear deal" orchestrated by the Obama Administration - the Biden White House has spent its tenure attempting to restore American participation in the controversial pact. While the Biden team has not reached his predecessor's level of total foreign policy subordination in pursuit of this goal, the White House's efforts to restore the ailing arrangement continue despite Iran's failure to adhere to both the spirit and letter of the agreement.
Of perhaps greater interest, another Iranian proxy, Yemen's Ansarullah - known colloquially as the Houthis - have launched a series of attacks against commercial shipping through the Red Sea, a strategic maritime choke point. These attacks have often been aimed at ships with Israeli connections, to include those operated by Danish shipping giant Maersk and French line CMA CGM. According to the Council on Foreign Relations, "Since mid-November 2023, the Yemen-based, Iran-backed Houthi rebel group has attacked dozens of commercial ships in the Red Sea, with no signs of slowing down." The Houthis have announced that the attacks constitute an effort to blockade Israel in solidarity with the Palestinian cause. This represents yet another occasion in which Iran has activated of one of Tehran's proxies in order to utilize irregular methods to affect de facto attacks against the international community.
Without going into exhaustive detail, as a result of the ongoing Yemeni civil war, the Houthis currently control approximately one third of Yemeni territory, including most of Yemen's Red Sea coastline. Clearly, one of Iran's objectives in supporting the Houthis has been to create a strategic dilemma on rival Saudi Arabia's southern border, this effort being itself an answer to Gulf Arab states' covert support to the Islamic State group in Iranian-aligned Syria and Iraq. Opposing this Iranian foothold on their border, in 2015, Saudi Arabia and several allies launched a sustained military campaign in support of the recognized Yemeni government. For a variety of reasons, Saudi operations in Yemen have drawn international criticism, and progressive activists in America and elsewhere have called for an end to Western support for the Saudi war effort. While the Obama and Trump Administrations sustained American support for the Saudi campaign, in 2021, President Biden made an as yet unfulfilled pledge to curtail this support. In the initial weeks of Biden's presidency, Secretary of State Antony Blinken also reversed his predecessor's addition of the Houthis to the American list of foreign terror organizations.
This, sustained Houthi attacks, and a corresponding surge in Somali piracy, have compelled international shipping operators, most notably Maersk, to divert between one fifth and one quarter of the Red Sea's normal traffic around Africa, in lieu of transit through the Red Sea. A recent video from What's Going on With Shipping's Sal Mercogliano noted the following:
1) The average toll paid to the Egyptian government for passage through the Suez Canal is half a million dollars. The diversion of approximately one fifth of shipping from the Red Sea route stands to significantly disrupt the Egyptian economy, potentially impacting Egypt's fragile medium-term political climate as well.
2) Mercogliano estimates fuel, charter, and other costs at around half a billion additional dollars per day during this prolonged period of disruption. For example, charter rates are currently up between 29% and 45% per day. In one case, the cost of transit between Shanghai and Rotterdam was up around 130% per day.
3) An estimated 400 ships per day are burning an additional 50 to 100 tons of fuel per day, and extending their voyages by approximately 3,500 miles to go around Africa instead of through the Red Sea. In addition to the costs for this additional fuel, the additional mileage represents a measurable surge in global emissions, carrying with it a corresponding environmental cost.
4) A significant volume of tankers, particularly those carrying liquefied natural gas, are among the diverted ships. As was the case one year ago, with the Northern Hemisphere in Winter, this is likely to cause a short-term disruption to global energy supplies, and a more sustained cost increase for end users of that energy. This consideration excludes any such surge resulting from increased demand for maritime shipping fuel.
Mercogliano notes that this disruption takes place at the same time as the Panama Canal is suffering from a reduction in its normal capacity, further reducing the global capacity for shipping via the most efficient routes. He also states, rightly, that this surge in shipping costs will inevitably be passed on to consumers. Of course, this takes place at a time when Western governments, constrained by efforts to undercut the Russian economy over the ongoing war in Ukraine, have been forced to increase energy costs for end users. (For example, the new year ushered in a 5% increase in United Kingdom energy prices due to the lifting of government price caps) Additionally, inevitable surges in the price of goods shipped by sea come at a time when the United States is experiencing sustained inflation, which may play a spoiling role in the upcoming election.
Echoing the Somali piracy crisis of 2008, the White House has dispatched the Navy, along with several allies, to participate in an anti-piracy effort called Operation Prosperity Guardian. Notably, several NATO allies have reportedly rejected American command of the coalition and withdrawn their participation. Additionally, a French warship is operating in the area, Paris having declared that the ship's specific purpose is to escort French-flagged ships. On January 3rd, the White House issued a joint statement from the United States and several additional international partners condemning the Houthis' disruptive efforts. For their part, the Houthis' have reportedly rejected this call to suspend their attacks, and Mercogliano expressed his opinion that the joint statement itself merely confirmed to the Houthis that their efforts have been effective.
While some commentators have taken to criticizing Democrats for this state of affairs, the truth is that Republicans' record is scarcely any better. Joe Biden currently occupies the Oval Office, so he necessarily shoulders the blame for these events, which may very well contribute to his political fate come November. However, neither party seems to have mastered the fine art of coordinating and reconciling ways and means to conceive of, let alone achieve, deliberate ends that serve America's national security interests - particularly upon several intersecting lines of effort. Former Secretary of Defense and retired Marine Corps General James Mattis ruefully describes Washington as a "strategy-free zone," and the current crisis in the Red Sea - and its inevitable second order effects - result from a confluence of decisions, both domestic and international, that may well carry a disproportionate impact the American political landscape. In the meantime, Americans should be prepared for fresh surges in inflation generally, and energy prices specifically, as well as rolling shortages of consumer goods.
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