Growing threats to Red Sea shipping routes could trigger a devastating regional conflict, analysts warn

A temporary halt to Saudi oil shipments through the Bab Al-Mandeb strait has heightened security concerns. (Shutterstock)
Updated 27 July 2018
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Growing threats to Red Sea shipping routes could trigger a devastating regional conflict, analysts warn

  • If the risk of attack on ships carrying Saudi cargo persists, there are two options for shipping companies: Either change the route or bear the additional cost of war risk insurance premium
  • The news that Saudi Arabia suspended oil shipments in response to an attack on two of the country’s tankers appears to have initially inspired some increased demand for oil, with WTI climbing back above $69 in the early hours of Thursday trade

LONDON: Houthi militia attacks on Saudi oil tankers in the Red Sea’s Bab Al-Mandeb strait have heightened regional tensions and sent shockwaves through global energy markets.

Saudi Arabia’s decision to temporarily halt oil shipments via the key waterway has also triggered concerns that the cost of transporting oil through increasingly risky Gulf waters could rise if the security of the route does not improve, analysts said.
Riyadh said on Thursday that it was suspending oil shipments in the strategic shipping lane following attacks on two Saudi oil tankers on Wednesday by Yemen’s Houthi forces, which are backed by Iran.
Khalid Al-Falih, the Saudi energy minister, said that the oil shipments would be halted until “the situation becomes clearer and the maritime transit through Bab Al-Mandeb is safe.”
Saudi Arabia exports an estimated 500,000 to 700,000 barrels per day through Bab Al-Mandeb, according to Reuters reports.
The Kingdom also transports oil via a pipeline to the Saudi city of Yanbu on the Red Sea, which supplies Europe and North America.
The attacks come just a few weeks after Iran threatened to close the Strait of Hormuz, a waterway that carries around a fifth of the world’s oil supplies.
The threat was made in retaliation to US President Donald Trump’s plan to reinstate sanctions against the country. Trump withdrew from the 2015 Iran deal brokered by Europe, the US and other global powers, in May — a move that both Saudi Arabia and the UAE backed.
Saudi Arabia and Iran have been entangled in a three-year proxy war in Yemen, with Saudi Arabia claiming that Iran has destabilized the region by arming Houthi forces in the conflict-ridden state.
Both Iran and the Houthi forces reject the claim.
The Houthis have previously threatened to block the straits, and said on Thursday that they have the ability to attack Saudi ports.
“This is a significant escalation in the conflict,” said Ali Vaez, director at the Iran Project, International Crisis Group, based in Washington DC.
“If a Saudi or Emirati vessel or tanker is hit and lives are lost, Riyadh and Abu Dhabi, along with their allies in Washington, might choose to retaliate directly against Iran, which could trigger a wider regional conflagration,” Vaez said.
“Iran is not a passive actor. If the US and its allies push it to a corner, it will eventually lash out through its partners and proxies throughout the region, exacerbating current tensions,” he said.
Ghanem Nuseibeh, founder of strategy consultancy Cornerstone Global Associates, agreed that the risks of further regional conflict had grown.
“There will be more pressure on Iran to secure the straits, but with the way the Iranian regime is responding to American and regional calls for calm, this is getting less and less likely. That is gradually increasing the chances of a military confrontation that could quickly escalate into an all-out war to have the straits resecured.”
The security issues will also have an impact on the shipping business, with a potential increase in the cost of insuring cargo.
Ships in the region will not only continue to deal with the ongoing threat of pirates that lurk off the coast of Yemen and Somalia, but now will also have to factor in the threat of the Yemen conflict spilling over into the seas.
Rajesh Verma, a tanker shipping analyst at shipping consultancy Drewry, said: “If the risk of attack on ships carrying Saudi cargo persists, there are two options for shipping companies: Either change the route or bear the additional cost of war risk insurance premium.
“Insurance premiums would increase if ships opt for the Red Sea route given the heightened risk of attack on vessels carrying Saudi cargo,” he said, estimating that costs may increase by 20-25 percent from the normal rate.
The alternative would be to re-route vessels around Africa and the Cape of Good Hope.
“The voyage distance — and thus shipping cost — however will be significantly higher in this case. For a tanker carrying Saudi crude from Ras Tanura to Rotterdam, sea days on front haul alone will increase from 21 via Red Sea and Suez canal to 36 via the Cape,” he said.
The temporary halting of Saudi oil shipments caused the oil price to jump initially on Thursday.
“The news that Saudi Arabia suspended oil shipments in response to an attack on two of the country’s tankers appears to have initially inspired some increased demand for oil, with WTI climbing back above $69 in the early hours of Thursday trade,” said Jameel Ahmad, global head of currency strategy and market research at FXTM.
He said that it was possible investors might price in some geopolitical risk premium into the oil markets following the news.
Others think this uptick is likely to be short-lived, with oil prices set to decline in the long term.
“Other factors, such as increased OPEC supplies and weakening global oil demand, mean that we still expect oil prices to fall over the next 18 months,” said Jason Tuvey, emerging markets economist at Capital Economics, in a research note on Thursday.
Cormac McGarry, maritime analyst at specialist risk consultancy Control Risks, said: “The Houthis have targeted Saudi tankers in the Red Sea before, notably the Abqaiq in April, and this incident demonstrates their continued capability to do so.
“But the Houthis are less likely to target vessels that are not affiliated with coalition states involved in Yemen. Doing so would draw more international forces, which are committed to freedom of navigation in the Red Sea, against them,” he said.


Tens of thousands of Palestinians flee West Bank refugee camps

Updated 18 February 2025
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Tens of thousands of Palestinians flee West Bank refugee camps

  • The camps, built for descendants of Palestinian refugees who fled or were driven from their homes in the 1948 war around the creation of the state of Israel, have long been major centers for armed militant groups

JERUSALEM: Tens of thousands of Palestinians living in refugee camps in the occupied West Bank have left their homes as a weeks-long Israeli offensive has demolished houses and torn up vital infrastructure in the heavily built up townships, Palestinian authorities said.
Israeli forces began their operation in the refugee camp in the northern West Bank city of Jenin on Jan. 21, deploying hundreds of troops and bulldozers that demolished houses and dug up roads, driving almost all of the camp’s residents out.
“We don’t know what’s going on in the camp but there is continuous demolition and roads being dug up,” said Mohammed Al-Sabbagh, head of the Jenin camp services committee.

An Israeli army excavator demolishes a residential building in the Tulkarem camp for Palestinian refugees during an ongoing Israeli military operation in the occupied West Bank on February 18, 2025. (AFP)

The operation, which Israel says is aimed at thwarting Iranian-backed militant groups in the West Bank, has since been extended to other camps, notably the Tulkarm refugee camp and the nearby Nur Shams camp, both of which have also been devastated. The camps, built for descendants of Palestinian refugees who fled or were driven from their homes in the 1948 war around the creation of the state of Israel, have long been major centers for armed militant groups. They have been raided repeatedly by the Israeli military but the current operation, which began as a ceasefire was agreed in Gaza, has been on an unusually large scale. According to figures from the Palestinian Authority, around 17,000 people have now left Jenin refugee camp, leaving the site almost completely deserted, while in Nur Shams 6,000 people, or about two thirds of the total, have left, with another 10,000 leaving from Tulkarm camp.
“The ones who are left are trapped,” said Nihad Al-Shawish, head of the Nur Shams camp services committee. “The Civil Defense, the Red Crescent and the Palestinian security forces brought them some food yesterday but the army is still bulldozing and destroying the camp.” The Israeli raids have demolished dozens of houses and torn up large stretches of roadway as well as cutting off water and power, but the military has denied forcing residents to leave their homes.
“People obviously have the possibility to move or go where they want, if they will. But if they don’t, they’re allowed to stay,” Lt. Col. Nadav Shoshani told reporters.
The operation began as Israel moved to banish the main UN Palestinian relief organization UNRWA from its headquarters in East Jerusalem and cut it off from any contact with Israeli officials.
The ban, which took effect at the end of January, has hit UNRWA’s work in the West Bank and Gaza, where it provides aid for millions of Palestinians in the refugee camps.
Israel has accused UNRWA of cooperating with Hamas and said some UNRWA workers even took part in the Hamas-led attack on communities in southern Israel on Oct. 7, 2023 that set off the 15-month war in Gaza.

 


More than one million Syrians return to their homes: UN

People walk past shops in Homs on February 10, 2025. (AFP)
Updated 19 February 2025
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More than one million Syrians return to their homes: UN

  • “Since the fall of the regime in Syria we estimate that 280,000 Syrian refugees and more than 800,000 people displaced inside the country have returned to their homes,” Filippo Grandi, the UN High Commissioner for Refugees

GENEVA: More than one million people have returned to their homes in Syria after the overthrow of Bashar Assad, including 280,000 refugees who came back from abroad, the UN said on Tuesday.
Assad was toppled in December in a rebel offensive, putting an end to his family’s decades-long grip on power in the Middle Eastern country and bookmarking a civil war that broke out in 2011, with the brutal repression of anti-government protests.
Syria’s war has killed more than half a million people and displaced millions from their homes.
The Islamist-led rebels whose offensive ousted Assad have sought to assure the international community that they have broken with their past and will respect the rights of minorities.
“Since the fall of the regime in Syria we estimate that 280,000 Syrian refugees and more than 800,000 people displaced inside the country have returned to their homes,” Filippo Grandi, the UN High Commissioner for Refugees, wrote on the X social media platform.
“Early recovery efforts must be bolder and faster, though, otherwise people will leave again: this is now urgent!” he said.
At a meeting in Paris in mid-February, some 20 countries, including Arab nations, Turkiye, Britain, France, Germany, Canada and Japan agreed at the close of a conference in Paris to “work together to ensure the success of the transition in a process led by Syria.”
The meeting’s final statement also pledged support for Syria’s new authorities in the fight against “all forms of terrorism and extremism.”
 

 


Israeli military says it struck weapons belonging to former Syrian administration in southern Syria

Updated 19 February 2025
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Israeli military says it struck weapons belonging to former Syrian administration in southern Syria

CAIRO: The Israeli military said on Tuesday that it struck weapons which it said belonged to the former Syrian administration in southern Syria.

 


Algiers slams French minister’s visit to W. Sahara

Updated 18 February 2025
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Algiers slams French minister’s visit to W. Sahara

  • France’s stance on Western Sahara has been ambiguous in recent years, often straining its ties with Morocco

ALGIERS: Algeria on Tuesday denounced a visit by French Culture Minister Rachida Dati to Western Sahara, after Paris recognized Moroccan sovereignty over the disputed territory, as “objectionable on multiple levels.”
The vast desert territory is a former Spanish colony largely controlled by Morocco but claimed for decades by the Algeria-backed Polisario Front.
Dati, who described her visit as “historic,” launched with Moroccan Culture Minister Mohamed Mehdi Bensaid a French cultural mission in the territory’s main city, Laayoune.
An Algerian foreign ministry statement posted on social media Tuesday said the visit “reflects blatant disregard for international legality by a permanent member of the UN Security Council.”
“This visit reinforces Morocco’s fait accompli in Western Sahara, a territory where the decolonization process remains incomplete and the right to self-determination unfulfilled,” it said.
Dati’s trip, a first for a French official, “reflects the detestable image of a former colonial power in solidarity with a new one,” the statement added.
The United Nations considers Western Sahara to be a “non-self-governing territory” and has had a peacekeeping mission there since 1991, whose stated aim is to organize a referendum on the territory’s future.
But Rabat has repeatedly rejected any vote in which independence is an option, instead proposing autonomy under Morocco.
France’s stance on Western Sahara has been ambiguous in recent years, often straining its ties with Morocco.
But in July, French President Emmanuel Macron said Rabat’s autonomy plan was the “only basis” to resolve the Western Sahara dispute.
Algeria has backed the separatist Polisario Front and cut diplomatic relations with Rabat in 2021 — the year after Morocco normalized ties with Israel under a deal that awarded it US recognition of its annexation of the Western Sahara.
In October, the UN Security Council called for parties to “resume negotiations” to reach a “lasting and mutually acceptable solution” to the Western Sahara dispute.
In November 2020, the Polisario Front said it was ending a 29-year ceasefire with Morocco after Moroccan troops were deployed to the far south of the territory to remove independence supporters blocking the only road to Mauritania.
The Polisario Front claims the route is illegal, arguing that it did not exist when the ceasefire was established in 1991.
 

 


Kurdistan region’s pipeline restart ready to go, foreign minister says

Updated 18 February 2025
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Kurdistan region’s pipeline restart ready to go, foreign minister says

  • Baghdad has periodically withheld the Kurdistan region’s share of the federal budget to try to stop it from exporting oil independently

BAGHDAD: A major pipeline connecting Iraq’s semi-autonomous Kurdistan region to Turkiye is ready to reopen and resume exports, the Kurdish foreign minister said on Tuesday, potentially ending a dispute between Baghdad and Irbil that led to the closure of the pipeline in 2023.
Foreign Minister Safeen Dizayee declined to say when the pipeline would reopen but said it would mark a turning point in relations between Kurdistan and Baghdad.
Iraq’s oil minister said on Monday the Iraq-Turkiye pipeline (ITP) will resume next week.
“All arrangements that were set on the table have been agreed to, with the aim to prepare for re-exports. There shouldn’t be any hiccups. The legal aspects have been met, the technical aspects are in place,” Dizayee told Reuters by phone. “The button just has to be pushed to increase production and then re-export.”
The oil flows were halted by Turkiye in March 2023 after the International Chamber of Commerce ordered Ankara to pay Baghdad damages of $1.5 billion for unauthorized pipeline exports by the Kurdistan Regional Government between 2014 and 2018.
Negotiations to restart the pipeline have been ongoing, with US officials participating in some of the talks.
Resuming oil exports will boost the Kurdistan region’s budget, Dizayee said.
“This means Kurdistan will benefit from the federal budget and hopefully this will end the saga of (civil servants’) salaries coming or not coming, received in dribs and drabs,” Dizayee said.
Baghdad has periodically withheld the Kurdistan region’s share of the federal budget to try to stop it from exporting oil independently.
Oil producers in the Kurdistan region have had to wind down production without an export route. It will likely take some time for them to restart their oil wells and for the pipeline to use its full capacity. Before it was shut down, it transported around 450,000 barrels per day.
“They’ve invested a lot. It was a risk they took and it must pay off. They [the companies] need assurances that their investment will not be down the drain,” Dizayee said. “Compensation is something that needs to be discussed.”
An international consultancy will be brought in to do an assessment of the cost of production, expenses, cost recovery and the production sharing agreements, he said.