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The United States and the United Kingdom announced Thursday the imposition of sanctions on four senior Houthi officials in Yemen, as the Iran-backed militant group escalates its attacks on commercial shipping in the Red Sea.
The sanctions target Houthi Defense Minister Mohamed Nasser al-Atifi, Houthi Naval Forces Commander Muhammad Fadl Abd al-Nabi, Coastal Defense Forces Chief Muhammad Ali al-Qadiri and Muhammed Ahmad al-Talibi, who serves as Houthi Procurement Director. armed forces is referred to.
“The Houthis’ ongoing terrorist attacks on commercial vessels and their civilian crews lawfully transiting the Red Sea and the Gulf of Aden threaten to disrupt international supply chains and freedom of navigation that are critical to global security, stability and prosperity is,” he said Brian E. Nelson, undersecretary of the Treasury Department's Office of Terrorism and Financial Intelligence, in a statement.
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In this photo published Nov. 20, 2023, a Houthi fighter stands on the deck of the Galaxy Leader cargo ship in the Red Sea. (Houthi military media / Handout / File / Portal Photos)
The Biden administration redesignated the Houthis as a terrorist organization in early January, three years after removing them from the list of foreign terrorist organizations. The new designation came in response to the group's attacks on merchant shipping in the Red Sea and the Suez Canal, a critical hub for global trade.
The attacks – which continued even after joint US and UK missile strikes on the group – caused transport costs to rise and crippled global trade routes. They stoked fears of a resurgence in inflation just as price pressures in the economy are finally starting to ease.
Oil prices have risen since the start of the new year as the US ramps up its response to the attacks.
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About 15% of global shipping traffic, including 30% of global container trade, passes through the Suez Canal. But to avoid being attacked or having their cargo stolen, many ships instead circumnavigate the Cape of Good Hope, the long circumnavigation of the African continent.
A cargo ship sails through the Suez Canal in Ismailia, Egypt, on December 29, 2023. (Fareed Kotb/Anadolu/Getty Images)
UBS estimates that the effective capacity of an Asia-Europe voyage is reduced by about 25% when ships pass through Africa, adding about two and a half weeks to the voyage duration.
Analysts at Bank of America warned in a note this month that disruptions in the Red Sea and Suez Canal as well as the Panama Canal could delay recent declines in inflation.
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“The scope for further declines could be limited in part by rising shipping costs due to problems in the Red Sea and low water levels in the Panama Canal,” they wrote.
Portal contributed to this report.