The US and Yemen’s Houthi rebels have entered a new phase of hostility, with both sides launching fresh attacks amid growing concerns over the safety of Red Sea shipping routes.

US Central Command has continued its operations against the Iran-aligned Houthis in response to the group’s threats to target shipping in the Red Sea. The escalation follows a warning from the Houthis last week that they would resume targeting vessels linked to Israel in retaliation to the blockade imposed on Gaza.

A Houthi representative, speaking via the Telegram platform, claimed responsibility for an attack on a US naval vessel, describing it as “retaliation for the continued American aggression against our country.” The spokesperson stated that 18 missiles and a drone were launched at the USS Harry Truman and its escorting warships.

The Houthi-controlled SABA news agency reported further air raids in the early hours of Monday, March 17, around the port city of Hodeida, approximately 230 km from Yemen’s capital, Sana’a. SABA also cited local officials who accused US forces of targeting a cancer facility under construction in the city of Sa’dah, leading to significant destruction.

The Houthis have maintained their campaign against maritime traffic on one of the world’s busiest waterways, significantly disrupting global trade. As a result, many vessels have opted for the longer route around Africa, circumventing the Suez Canal, since hostilities resumed.

In a statement, the US military said: “Our forces continue operations against Iran-backed Houthi terrorists,” indicating a firm stance against the Yemeni group.

The Houthi threats to shipping in the Red Sea came amid an intensification of Israeli bombardments on Gaza, which the Houthis have used as justification to resume attacks. Their previous campaign, which had halted following a ceasefire in Gaza, specifically targeted ships with perceived links to Israel.

On Saturday, the US conducted a series of airstrikes across Yemen, causing substantial casualties. According to Reuters, the US attacks killed at least 53 people, most of whom were women and children, with many more injured. The majority of these strikes focused on the Houthi stronghold of Sa’dah Province.

The Houthis have been a dominant force in Yemen’s ongoing civil war, expanding beyond their northern base in Sa’dah to capture the capital, Sana’a, in 2014. This triggered a military intervention by Saudi Arabia, but the conflict has since drawn in multiple international actors.

The group’s recent military advances have seen them gain control over significant oil and gas infrastructure in the central provinces of Ma’rib and Shabwa. These regions have become key battlegrounds, shifting the focus from the western coastal province of Hodeida. Notably, the Shabwa province hosts the Balhaf port, the site of the Yemen LNG terminal. Despite the conflict, TotalEnergies, the facility’s lead stakeholder, reported that the plant remains in “good condition” despite some damage to the pipeline.

In addition to the oil infrastructure, the Houthis have also targeted Red Sea shipping lanes. Their actions have included attacks on the Safer floating storage and offloading vessel located off the coast of Ras Isa. These disruptions have prompted international concern over the security of maritime passages crucial for global trade.

The US and UK have previously conducted joint airstrikes targeting Hodeidah, following similar attacks at Ras Isa in January. The Yemeni government requisitioned parts of the Balhaf facilities for coalition forces supporting the government, yet the terminal remains operational.

As the conflict persists, the Houthis have vowed to continue their maritime assaults until hostilities in Gaza cease. The international community remains vigilant as the situation evolves, monitoring the potential impacts on global shipping and trade routes.

 

Oil shipping risks 

The Suez Canal and Red Sea are the fastest shipping route for shipping between Asia and Europe, and so hostilities in the area have important implications for global oil trade. Prior to the Red Sea crisis, around 15% of the world’s total crude and 15% of total petroleum product trade passed through the route, amounting to roughly 9mn barrels per day (bpd). This more than halved in 2024.

Oil prices rose after the weekend’s developments, with Brent peaking at $71.7 per barrel in the early hours of March 17, after closing last week at $70.5. As of 06:00 GMT on March 18, the benchmark was priced at $71.5. The Red Sea attacks were only one among several factors affecting prices, however. Another was China’s unveiling of a special action plan to boost domestic consumption, along with reporting stronger-than-expected economic data. 

It remains to be seen whether further escalation will occur, which could cause more oil trade to be switched from the Red Sea to the Cape of Good Hope, which adds somewhere between nine and 14 days to the journey time. 

In 2023, 8% of global LNG shipping passed through the Suez Canal and Red Sea, with the route primarily used for deliveries from Qatar to Europe and from the US, Russia, Algeria and Egypt to Asia. However, LNG shipping through the area has already all but ended since Houthi attacks first started towards the end of 2023, with cargoes redirected around the Cape of Good Hope. As such, the latest bout of hostilities should have no impact on the market.

In mid-February, Reuters reported that an LNG carrier passed through the Red Sea for only the second time since June 2024. LNG is far more volatile than oil, and because of the risk of a catastrophic vessel explosion, LNG shippers were far more eager to stop using the Red Sea than oil shippers. Using the Cape of Good Hope adds around nine to 12 days to the journey time of LNG carriers travelling between Asia and Europe. 

While not affecting current trade flows, increased attacks make it less likely that LNG shipping will return to the Red Sea in the foreseeable future.