What attacks on shipping mean for the global maritime order

Europe & Eurasia Maritime Security Non-Traditional Threats Russia Security & Defense Yemen

Report August 9, 2024

What attacks on shipping mean for the global maritime order

Executive summary
History of attacks on shipping
Threats to commercial vessels in the Black Sea, the Taiwan Strait, and the South China Sea
Houthi attacks on merchant vessels: A new form of aggression
International response to the Houthis’ attacks
The shipping industry’s response
Improving strategies to counter attacks on shipping
Preemptive diversion of shipping
Intra-industry risk updates
Use of directed-energy weapons
Selective protection dependent on flag registration
Freedom-of-navigation operations
Disrupting the delivery of weapons
Armed guards on board
Conclusion

Executive summary

For as long as shipping has existed, merchant vessels have been vulnerable to attacks, especially in wartime. Starting in the beginning of the twentieth century, when international trade expanded rapidly, nations signed a string of treaties to protect merchant vessels from attacks by hostile states. With a few notable exceptions, most importantly the Iran-Iraq “Tanker War” in the 1980s, countries have complied with these rules.

Since the late 2010s, however, there has been a radical increase in state-linked attacks and harassment of merchant vessels. Around that time, Iran and, to a lesser extent, Israel began attacking vessels linked to the other side, primarily in the Strait of Hormuz, a situation that persists. China, for its part, has taken to harassing merchant vessels in the South China Sea in a strategy to enforce its unilateral territorial claims. The harm imposed on merchant vessels further increased in November 2023, when the Iran-linked Houthi rebels launched geopolitically linked attacks on shipping in the Red Sea. Eight months later—despite interventions by the US Navy, the United Kingdom’s (UK) Royal Navy, European Union (EU) navies, and other Western navies—the attacks continue and have caused large-scale rerouting to the Cape of Good Hope.

The increasing attacks on merchant vessels pose an acute threat not just to seafarers and shipping companies, but also to the global maritime order on which modern economies are based. This report discusses the history of attacks on shipping, the rules implemented to keep shipping safe, and the new and serious threats posed by the Houthis and other actors. It also discusses steps Western governments and the shipping industry can take to reduce the harm posed by such attacks. These steps include:

collective threats of rerouting away from risky waters;
directed-energy weapons on naval vessels protecting merchant shipping; and
increased focus on disrupting militias’ supply chains.

History of attacks on shipping

“Japan’s dependence on international economic ties for its survival is well recognized…In recent years, however, another source of vulnerability has assumed importance-the threat of international shipping disruptions in the Middle East.” Thus begins an article in the academic journal Pacific Affairs—not from 2023, but from 1986. In the Persian Gulf, Iraq had taken to attacking merchant ships linked to Iran as part of its war against the Islamic Republic.

The attacks began in 1981, the war’s second year, when Iraq attacked five merchant vessels, “largely to reduce Iran’s oil exports, which go entirely by sea and which help finance Iran’s war effort.”¹ The following year, Iraq attacked sixteen vessels carrying Iranian oil; the next year, it was twenty-two. In 1984, Iran began responding in kind. That year, Iraq attacked fifty-three tankers linked to Iran, while Iran attacked sixteen tankers linked to Iraq. By 1987, the numbers had risen to eighty-eight attacks by Iraq and ninety-one by Iran. The systematic attacks on the other side’s merchant vessels became known as the Tanker War, and it alarmed the outside world, which by that point was dependent on the supply of oil through the Persian Gulf. “Mizuo Kuroda, Japanese ambassador to the United Nations, in the Security Council debate on the gulf conflict in May 1984, made an appeal that Iran and Iraq and all other states exercise the utmost restraint, and asked that both countries respect the right of safe navigation. (However, attacks on neutral shipping have continued.),” the Pacific Affairs article noted. In the summer of 1987, after neutral Kuwait had concluded that Kuwaiti-flagged tankers could no longer travel through the Gulf and asked for permission to have them reflagged as American, the tankers were reflagged and the United States launched Operation Earnest Will, which saw US Navy vessels escort the US-flagged Kuwaiti vessels between the Gulf of Oman and their home ports.²

When the Iran-Iraq war ended the following year, more than 320 merchant mariners had been killed, injured, or were missing. Three hundred and forty merchant vessels had been damaged, some more than once. Some 30 million tons of cargo had been damaged, while eleven ships had been sunk and three dozen declared total losses.³

The Tanker War became infamous because it was a blatant case of aggression against merchant shipping as a tool of war, and it took place during a period in which countries’ economies were beginning to globalize. The Warsaw Pact countries largely operated in parallel with Western market economies and China was still a mostly closed economy, but Japan and South Korea were trading heavily with Western economies,Latin American economies had also begun opening up, and Middle Eastern oil fueled many countries’ growing economies. It was against this background that the Tanker War was such a shock. It demonstrated to increasingly commercially linked countries that global shipping—the most important tool of global trade—could easily be targeted by interested nations and that there was little other countries could do to stop the attacks.

However, geopolitically motivated attacks on shipping are nearly as old as shipping itself.⁴ Indeed, merchant vessels have been regularly attacked during wars. As H. B. Robertson, Jr. notes

During the Napoleonic era, both France and England utilized their differing strengths in an attempt to curtail the other’s logistic and commercial capabilities. In the American Civil War, the blockade of the Confederacy was a principal component of the Union’s war strategy. The indispensable condition for victory by Japan in its 1905 war with Russia was control of the seas. Without this advantage, Russia could have resupplied its superior land armies from the sea. During the progress of both WorId Wars, success of the maritime resupply effort of the Allied Powers, particularly Great Britain, was the sine qua non of victory.⁵

Until the nineteenth century, “privateers” also attacked merchant vessels on behalf of a country’s armed forces in exchange for bounties from the vessels.⁶

The reason merchant vessels have so systematically been attacked during wars is, of course, that they carry vital supplies to the adversary. “If it is true that merchant shipping can be critical to a nation’s ability to prosecute a war effort, it is equally true that the opposing power will seek to interdict that supply effort,” Robertson notes. “Tactics, weapons systems and geography are variables that will affect any interdiction effort but the interdiction effort fits nearly with the general principles of war.”⁷

Yet, by the time World War I erupted, nations realized that unrestricted warfare against merchant shipping was unsustainable and sought to restrict it. Traditional (or customary) international law had established a distinction between enemy naval ships and enemy merchant vessels, with the latter granted protection from attacks. The Hague Conventions, to which forty-four countries agreed in 1907, included an article on the status of merchant ships following the outbreak of hostilities. It stipulated that “the belligerent may only detain it, without payment of compensation, but subject to the obligation of restoring it after the war, or requisition it on payment of compensation” and that “enemy merchant ships which left their last port of departure before the commencement of the war, and are encountered on the high seas while still ignorant of the outbreak of hostilities cannot be confiscated.”⁸

The Hague Convention became international customary law, the de facto legal baseline governing merchant shipping during armed conflict. This meant that “merchant ships, even those sailing under the flag of the enemy, are considered as civilian objects and manned by civilian crews, and so long as they maintain their proper role, are subject only to seizure as prize and subsequent condemnation in prize courts of the capturing belligerent. Only in special circumstances is the capturing power allowed to destroy the prize, and then only after removing the passengers, crew and ship’s papers to a place of safety.”⁹ Germany had, however, developed a submarine fleet. During World War I, these submarines set about attacking merchant vessels supplying the Allies. In the first months of 1917, following German submarine attacks on several US merchant ships, the United States declared war on Germany.¹⁰

In the years after World War I, states sought to further codify merchant vessels’ rights, which resulted in the London Protocol of 1936. By 1939, all of World War I’s combatant countries except Romania had joined the protocol, which stipulated

A warship, whether surface vessel or submarine, may not sink or render incapable of navigation a merchant vessel without having first placed passengers, crew and ship’s papers in a place of safety. For this purpose the ship’s boats are not regarded as a place of safety unless the safety of the passengers and crew is assured, in the existing sea and weather conditions, by the proximity of land, or the presence of another vessel which is in a position to take them on board.¹¹

Even so, World War II saw regular attacks on merchant vessels. International customary law was simply ignored. As a result, some vessels sought to reduce the risk of attack by sailing under neutral countries’ flags (including the increasingly popular flag of Panama). As Robertson notes, both the Allies and the Axis powers attacked enemy merchant vessels—and sometimes even neutral merchant ships—and did so without ensuring the safety of the passengers, the crews, or the ships themselves, even though the protocol obliges warring parties to take such action.

Both sides justified these practices either on the basis of reprisal (which in itself is an admission that absent the first violation by the other side, the practice is illegal under international law) or on assertions that the other side had incorporated its merchant fleet into the combatant force by mounting offensive weapons on the ships, convoying them, requiring them to report enemy submarine sightings, and ordering them to take offensive action against surfaced submarines.¹²

Toward and after the end of World War II, the world’s nations attempted to create a global system of rules and institutions, with the United Nations (UN) at its center. In addition to the United Nations itself, nations created the International Civil Aviation Organization, the Food and Agriculture Organization, the World Health Organization (WHO), and a string of other bodies. In 1948, they adopted the Convention on the International Maritime Organization and agreed to form the Inter-Governmental Maritime Consultative Organization (IMCO). The name was later changed to the International Maritime Organization (IMO) and came into force ten years after its adoption. The organization’s statutes placed little emphasis on maritime security, focusing instead on promoting economic action in support of freedom and reducing discrimination in some countries.¹³ Article C, for example, states an IMCO aim “to provide for the consideration by the Organization of matters concerning unfair restrictive practices by shipping concerns.”¹⁴

Indeed, such was the desire for safe shipping among the world’s nations that a focus on security in the IMCO’s founding statute seemed unnecessary. Harm caused by pirates and criminals posed a problem, but even the most ideologically opposed governments agreed that shipping needed to be kept safe. Countries deliberately harming merchant vessels was no longer acceptable.

Even with the IMCO’s rules in place, ships continued to face considerable threats, but such threats came from criminals, terrorists, and malcontents. In 1961, a group led by Captain Henrique Galvao hijacked the Portuguese passenger ship Santa Maria in protest against the regime of Antonio de Salazar. In subsequent years, Cuban exile groups attacked Russian and Cuban merchant vessels, though they sometimes got the wrong ship, and the Palestinian terrorist group PLFP attacked vessels bound for Israeli ports. Groups with other causes similarly found shipping a convenient target. RAND researchers summarized the problem.

Besides guerrillas and terrorists, attacks have been carried out by modern day pirates, ordinary criminals, fanatic environmentalists, mutinous crews, hostile workers, and foreign agents. The spectrum of actions is equally broad: ships hijacked, destroyed by mines and bombs, attacks with bazookas, sunk under mysterious circumstances; cargos removed; crews taken hostage; extortion plots against ocean liners and offshore platforms; raids on port facilities; attempts to board oil rigs; sabotage at shipyards and terminal facilities; even a plot to steal a nuclear submarine.¹⁵

The Tanker War received such global attention because it was an extremely rare example of nation-states targeting merchant vessels. The attacks created considerable risks for vessels beyond those linked to the two respective countries. “Like the Houthis today, the Iraqi and Iranian armed forces at that time weren’t always that accurate in their targeting,” noted Svein Ringbakken, a maritime executive with several decades in the business who now serves as managing director of the Norway-based maritime war insurer DNK.¹⁶ Of the vessels attacked, sixty-one sailed under the Liberian flag, forty-one under the flag of Panama, thirty-nine under the flag of Cyprus, and twenty-six under the flag of Greece. A number of other Western countries similarly saw vessels sailing under their flag attacked. Forty-six were Iranian flagged. Ringbakken added that “the ships that were going back and forth to [in the Gulf] were often attacked several times each, so the number of attacks were much higher than the 340 ships that were listed as having been attacked.” Had the merchant vessels carrying oil and other supplies through the Gulf been less sturdy, the human and material losses caused by the Tanker War would have been even more dramatic.

But not even during the height of the Cold War, in the 1960s and 1970s, did NATO or Warsaw Pact member states systematically seek to harm merchant vessels linked to the other side. NATO and Warsaw Pact countries indisputably acted unethically in other ways, but in the maritime domain they respected rules, conventions, and the neutrality of merchant shipping. They did so not least because they also depended on ships carrying goods to and from their countries being able to travel safely.

Indeed, when the attacks by terrorists and other non-state entities continued, the world’s nations convened to negotiate and adopt the International Convention for the Safety of Life at Sea (SOLAS), the fifth version of global shipping’s cornerstone safety treaty, which governs the safety of the vessels themselves. (Previous versions had been adopted in 1914—in response to the Titanic disaster—and then in 1929, 1948, and 1960.)¹⁷ Five years later, in 1979, nations adopted the International Convention on Maritime Search and Rescue (SAR), which entered into force in 1985. SAR governs the responsibilities of coastal states in maritime search and rescue; the 1979 version divided the world’s oceans into thirteen search-and-rescue regions and introduced the obligation for countries to operate rescue co-ordination centers on a twenty-four-hour basis with trained, English-speaking, staff.¹⁸

The crowning achievement of Cold War maritime agreements took place in 1982, when negotiators representing 160 nations adopted the United Nations Convention on the Law of the Sea (UNCLOS), the “constitution of the oceans.”¹⁹ UNCLOS covers crucial areas including exploitation of ocean and seabed resources, as well as maritime transit rights. Crucially, coastal states are given territorial rights over waters extending twelve nautical miles from their coastlines; foreign vessels have the right to sail through these waters under UNCLOS’s “innocent passage” provision. Coastal states are also given limited rights in the Exclusive Economic Zones extending another two hundred nautical miles beyond their territorial waters.²⁰

A rare case of apparently state-linked attacks on merchant shipping took place in 1984, when nearly twenty vessels transiting the Red Sea were struck by mines. Egyptian and Western authorities subsequently identified the Ghat, a Libyan-flagged merchant vessel, as the culprit. Libya’s motivation for the attacks appears to have been ruler Muammar al-Qaddafi’s desire to demonstrate what he punish other Arab regimes’ misguided policy of maintaining close relations with the West.²¹

From the early 1990s, the end of the Cold War and the beginning of more harmonious relations between crucial groupings of countries decreased geopolitically linked risk everywhere, including in shipping. Crucially, the end of the Cold War delivered an extraordinary rise in commercial relations between previously hostile countries. In addition, China had begun opening up its closed economy in the 1980s and was quickly becoming a manufacturing hub for Western companies. The rapidly growing trade and resulting globalization were facilitated by global shipping. Between 1990 and 2019, global shipping grew nearly threefold, from 4,008 million tons loaded to 11,076 million tons loaded.²²

During the 1990s and 2000s, and until the late 2010s, shipping had to contend with spikes in piracy attacks, but geopolitically linked attacks remained minimal. The few attacks that took place, most prominently an explosion on the French-flagged oil tanker Limburg off the coast of Yemen, were carried out by terrorists.²³ In Nigeria in the early 2000s, the Movement for the Development of the Niger Delta—a local militant group—kidnapped oil workers and attacked oil facilities and pipelines, though this was done in protest against inequalities in Nigeria.

The mostly peaceful period ended around 2019, when a proxy war targeting merchant vessels unfolded in the Strait of Hormuz, an indispensable body of water through which more than 20 percent of global petroleum travels.²⁴ In 2018, Donald Trump’s administration took the United States out of the Joint Comprehensive Plan of Action (JCPOA), also known as the “Iran nuclear deal.” Soon after that, Iran began to regularly harass merchant vessels in the Strait of Hormuz. In a particularly high-profile incident, Iran’s Islamic Revolutionary Guard Corps (IRGC) seized the Swedish-owned, UK-flagged oil tanker Stena Impero passing through the Strait of Hormuz on July 19, 2019, and took the crew hostage.²⁵ Though the IRGC alleged that the tanker had struck a fishing boat and failed to obey IRGC instructions, there was no evidence of this. Since then, attacks on merchant vessels have continued. Merchant vessels sailing under flags ranging from those of Norway to the United Arab Emirates have been struck by mines, magnetic mines, and torpedoes.²⁶ In August 2023, the United States dispatched a naval and Marine force to the strait to “support deterrence efforts.”²⁷ By that point, there had been twenty attacks on merchant shipping in the strait since the beginning of 2021, including two on July 5, 2023, when Iranian naval vessels attempted to seize two oil tankers.²⁸ The US Navy and Marine presence appears to have succeeded in deterring the aggression, which subsided after the force’s arrival. As with all deterrence measures, though, it’s impossible to know whether the attackers had already been planning to reduce their aggression or whether the deterrence measures changed their cost-benefit calculus.

Threats to commercial vessels in the Black Sea, the Taiwan Strait, and the South China Sea

In early 2022, another threat to global shipping emerged when Russia deployed close to two hundred thousand troops to its border with Ukraine. It was clear that any invasion by Russia would also involve attacks on Ukraine’s Black Sea ports and on shipping in the Black Sea. In the weeks immediately following the invasion, several merchant vessels in Ukrainian waters and ports were struck in suspected Russian attacks. On February 25, for example, a tanker was struck by missiles. Two crew members were injured, and the crew was forced to abandon ship.²⁹ On March 2, a Bangladeshi seafarer was killed when a shell hit his vessel in the Ukrainian port of Olvia.³⁰ In addition, when Russia invaded, ships crewed by some 800–1,000 seafarers were docked in seven Ukrainian ports and, in practice, unable to leave. Being stuck in Ukrainian ports, of course, made them an easy target for Russian attacks and also raised the risk of their becoming collateral damage of attacks against other targets.³¹ “There were more than 90 vessels [stuck in Ukrainian ports] to start with, and during the [UN-negotiated grain] Corridor [between Russia and Ukraine that allowed ships carrying grain to leave Ukrainian ports, traveling through a Black Sea corridor on to international destinations], about 30 got out. We ended up with around 65 claims for total loss,” said Neil Roberts, the secretary of the maritime insurance industry’s Joint War Committee, which lists international waters according to risk level.³²

Shipping in the Taiwan Strait has been similarly threatened, but has not yet been attacked. When, in April 2023, President Tsai Ing-wen of Taiwan met with US Speaker of the House Kevin McCarthy in California, Beijing registered its displeasure by launching an offensive military exercise targeting Taiwan and sending a coast guard “inspection flotilla” to the Taiwan Strait. The strait is the main passage for cargo moving between Southeast Asia and Japan, South Korea, and northern China, which makes it one of the world’s busiest maritime thoroughfares; some 240–500 ships per day, including nearly nine in ten of the world’s largest container vessels, pass through the strait on an average day.³³ Beijing, which considers Taiwan a region of China, argues it has “sovereignty and jurisdiction” over the strait, while Taiwan and countries including the United States consider it international waters divided along the strait’s unofficial median line.

By threatening to inspect ships passing through the strait, on the basis of legal powers not recognized by Taiwan and large parts of the international community, China would be able to severely disrupt shipping in the strait and, thus, cause considerable problems for shipping globally. Yet, the deployment of an inspection flotilla—whether or not it carries out any inspections—hardly reaches the threshold where the US Navy or another navy would consider it necessary to intervene. In its law-enforcement scope of inspections of merchant vessels (albeit on Taiwan’s side of the median line), China’s inspection flotilla differs from the overtly aggressive actions China’s coast guard, maritime militia, long-distance fishing fleet, and other maritime entities take. All, though, constitute a risk to civilian vessels. Roberts noted

China has long been “leaning in” via its fishing fleet, and it’s been building all these little islands in the South China Sea. The Chinese government issues white papers to float their ideas, for example saying they’ll allow their Coast Guard to fire on all vessels in their territorial waters. And if nobody reacts, then they make it policy. Whilst the littoral states do not agree, they’re up against a huge nation and there’s no one in the area who’s in a position to react. That comparative disparity is what China has leveraged in deploying the inspection flotilla to the Taiwan Strait.³⁴

In addition, China’s maritime militia, coast guard, and long-distance fishing fleet habitually harass vessels, including civilian ones. These activities are of particular concern in the South China Sea, through which approximately one-third of global trade travels, as China claims some 90 percent of these waters under its “nine-dash line” policy.³⁵ These practices, which will be analyzed in a subsequent report as part of the Atlantic Council’s Maritime Threats project, are not specifically targeted against shipping but instead target a wide range of vessels, including civilian ones. Survey vessels sailing under the flags of Norway and Vietnam, for example, have been harassed by a combination of Chinese vessels.³⁶ Since the beginning of the 2020s, the harassment has increased significantly, creating an environment of heightened uncertainty and risk for merchant vessels. This uncertainty is heightened because it’s entirely unclear how coastal states and de facto protectors of the global maritime order, most notably the US Navy, can deter such activities. As Ringbakken noted

China has its Navy, it has its Coast Guard and it has the militia and the fishing boats and this kind of crossover between the fishing boats and the militia, which is a strange construct. And China has a long-term perspective. These small skirmishes and the small transgressions are not viewed as an attempt to undercut the global maritime regime, but that’s what they are. It’s what you might call the Chinese water torture method. Any kind of countermeasure from the Americans or others would seem disproportionate. The activity is just merely little bit out of normal and not like what the Houthis are doing in the Red Sea, and that makes responding even harder. You don’t send a naval group to try to stop this kind of behavior because it seems too minor. So it goes on.³⁷

The US military has come to much the same conclusion. “It’s getting more aggressive, they’re getting more bold and it’s getting more dangerous,” Admiral John Aquilino told media in late April 2024, shortly before handing over command of the US Indo-Pacific Command. He added that China was increasing its aggression through a “boiling the frog” strategy. “There needs to be a continual description of China’s bad behavior that is outside legal international norms,” he noted. “And that story has to be told by all the nations in the region.”³⁸

Indeed, China’s maritime harassment can easily be expanded to target many more cargo ships, in addition to the fishing vessels and supply vessels that have until now been the most frequently targeted categories. In the area of unilateral inspection flotillas , if the flotilla that was dispatched during Tsai’s visit to California were to be followed by similar measures, shipping companies and their insurers would need to assess whether it’s worth sending vessels through the Taiwan Strait. “Even if the US Navy wanted to intervene, it would be seen a gross intrusion, and it could spark something far worse. The merchant ships are on their own,” Roberts noted.³⁹ Ships don’t need to go through the strait to reach destinations other than Taiwan; they can simply travel along Taiwan’s eastern coast. That route, however, would render them unable to call at Taiwan’s main port—the massive Port of Kaohsiung—or the Port of Taipei. This is what makes a blockade of Taiwan, whether executed by the China Coast Guard, the People’s Liberation Army Navy, China’s maritime militia, or a combination of the three, possibly with other entities also involved, such a troubling scenario.⁴⁰ “What would happen to Taiwan if ships don’t call at its ports? Well, ultimately the people of Taiwan will starve ,” Roberts said. “But shipowners have to focus on crew welfare and they’d just go around [east of Taiwan] and take a bit more fuel. It’s really difficult.”⁴¹

Houthi attacks on merchant vessels: A new form of aggression

On November 19, 2023, armed commandos belonging to the Yemeni Houthi militia stormed the Galaxy Leader, a Bahamas-flagged roll-on, roll-off (RORO) carrier traveling through the Red Sea near the Yemeni port of Hodeida. The commandos, who filmed themselves arriving in a helicopter, took the twenty-five-strong crew hostage and directed the Galaxy Leader to Hodeida and then the port of Al Saleef, which is also controlled by the Houthis.⁴² The Galaxy Leader had apparently been targeted because it is part-owned by Israeli national Abraham “Rami” Ungar, though his firm is registered in the United Kingdom.

“The Yemeni Naval Forces managed to capture an Israeli ship in the depths of the Red Sea taking it to the Yemeni coast. The Yemeni armed forces deal with the ship’s crew in accordance with the principle and values of our Islamic religion,” Houthi spokesman Yahya Sare’e declared on X on the same day.

The Yemeni armed forces reiterate their warning to all ships belonging to or dealing with the Israeli enemy that they will become a legitimate target for armed forces. […] Yemeni armed forces confirm that they will continue to carry out military operations against the Israeli enemy until the aggression against Gaza stops and the heinous acts against our Palestinian brothers in Gaza and the West Bank stop…If the international community is concerned about regional security and stability, rather than expanding the conflict, it should put an end to Israel’s aggression against Gaza.⁴³

“All ships belonging to the Israeli enemy or that deal with it will become legitimate targets,” the Houthis added in a statement after the hijack.⁴⁴ The opportunistic labeling of the attacks as being an act of support for the people of Gaza was a clever move by the Houthis, gaining the attacks attention far beyond the global maritime community and gaining the Houthis sympathy for their actions among the public in countries troubled by Gazans’ plight. It also made any response by the United States and other Western countries geopolitically fraught. A few days later, assailants identified as Houthis attacked the Israel-linked tanker Central Park in the Gulf of Aden, the body of water that leads into the Red Sea.⁴⁵ On December 3, the Houthis attacked three additional vessels.⁴⁶

The attacks continued, though the targeted vessels’ alleged Israeli links were not always clear or even existent. On December 9, the militia expanded its scope, saying it would also target ships headed for Israeli ports. Two days later, it hit the Strinda, a tanker owned, managed, and flagged in Norway and crewed by Indians, which the Houthis said was headed for Israel, though the owner said the tanker was bound for Italy.⁴⁷

On December 15, a Houthi drone struck the Liberian-flagged Al Jasrah and two Houthi missiles struck the MSC Palatium III, which was also sailing under Liberian flag; both were thought to be headed for Israeli ports. On the same day, the Houthis threatened another Liberian-flagged vessel, the MSC Alanya, and told it to turn around.⁴⁸ “The Houthis’ targeting mechanism wasn’t that good, or their intelligence wasn’t entirely up to speed,” Ringbakken said. “And we don’t know for sure whether that was by chance or whether they didn’t mind a little bit of collateral damage because that got them more attention.”⁴⁹

Indeed, the Houthis appear to have decided to make necessity into an extraordinary virtue. Instead of having to conduct painstaking research into vessels’ complex ownership and management structure, and their cargo’s provenance and destination, the Houthis—while declaring that they were targeting Israeli-linked vessels—attacked a range of merchant vessels in the Red Sea, the Bab el-Mandeb Strait, and the Gulf of Aden. That, of course, has made the waters unsafe for vessels form all countries, though the Houthis appear to consistently have exempted vessels linked to Russia and China. Retired Rear Admiral Nils Wang, a former chief of the Danish Navy, noted the following.

It’s instructive to compare the Houthis’ attacks to the piracy of the Horn of Africa [that was particularly frequent in the early 2010s]. With the pirates off the Horn of Africa, the intimidation of international shipping was the same. That made launching a counter-piracy operation straightforward. Everybody, including China, Pakistan, Iran, everybody was of the opinion that this piracy had to be stopped. Indeed, the military operations against piracy at that time were probably the biggest multinational military operation that has ever taken place, if you count on how many countries, regions, and continents were involved. Everyone agreed that the piracy had to be stopped. If you then compare that to the situation now in the Red Sea, the Houthis only seem to be targeting ships linked to the West, not to Russia and China. And it’s only the Western world that is intervening to protect the ships there.⁵⁰

By pure coincidence, the IMO Assembly—the IMO’s governing body—was scheduled to hold its biannual meeting in late November and December 2023. Various items had been submitted for consideration by the assembly, including measures to prevent the growing dark fleet.⁵¹Unsurprisingly, the Houthis’ attacks received urgent attention. The Bahamas, the world’s eighth-largest flag state, criticized the Houthis’ attacks on merchant vessel as a “violation of all of the norms relating to innocent passage of ships.”⁵² And, referring to the Houthis, the country added, “Here we have non-state actors so who do you hold responsible?”

That is the dilemma posed by the Houthis’ novel campaign against shipping. The militia attacks ships ostensibly for geopolitical reasons, and it’s backed by a nation-state, but it’s not an official government. The militia is also linked to Iran but doesn’t officially represent this country either. “That makes it difficult to make this a matter between a hostile country and other countries, but at the same time, the Houthis are a completely different category from pirates and other opportunistic attackers without government links,” Wang said.⁵³

It should, therefore, come as no surprise that Western governments have struggled to formulate strategies to deter the attacks.

International response to the Houthis’ attacks

On December 18, the United States announced the establishment of Operation Prosperity Guardian, a naval task force comprising the United States, the United Kingdom, Bahrain, Canada, Denmark, France, Italy, Netherlands, Norway, the Seychelles, Spain, and several other nations, amounting to a total of twenty countries.⁵⁴ Some opted not to divulge their participation out of concern that doing so could increase the risks for their countries. “The recent escalation in reckless Houthi attacks originating from Yemen threatens the free flow of commerce, endangers innocent mariners, and violates international law,” US Secretary of Defense Lloyd Austin said in the press release announcing the task force. “The Red Sea is a critical waterway that has been essential to freedom of navigation and a major commercial corridor that facilitates international trade. Countries that seek to uphold the foundational principle of freedom of navigation must come together to tackle the challenge posed by this non-state actor launching ballistic missiles and uncrewed aerial vehicles (UAVs) at merchant vessels from many nations lawfully transiting international waters.”⁵⁵

Operation Prosperity Guardian is set up as “highway patrol in the Red Sea and the Gulf of Aden” with the task of averting attacks on merchant vessels, not punishing the Houthis.⁵⁶ It will “respond to and assist as necessary commercial vessels that are transiting this vital international waterway,” Pentagon spokesman Major General Pat Ryder said in a briefing on December 21.⁵⁷ “It’s a defensive coalition meant to reassure global shipping and mariners that the international community is there to help with safe passage.”⁵⁸

Prosperity Guardian is a fitting name for a naval coalition tasked with thwarting the attacks on merchant vessels in the Red Sea and the adjacent Bab el-Mandeb Strait and Gulf of Aden. The water forms a crucial thoroughfare in the globalized economy; under normal circumstances, some 15 percent of global maritime trade passes through it.⁵⁹ Indeed, in deciding to attack shipping, the Houthis have opted for the form of aggression that would yield by far the most global disruption and attention.

Since December 19, Prosperity Guardian’s members have escorted merchant vessels with links to a wide range of countries (not just the countries involved in the operation). They have also regularly thwarted attacks. This is deterrence by denial: by denying the attackers the gain they seek, the defenders are changing the attackers’ cost-benefit calculus. “You always have the right to self-defense,” Wang noted. “So if you are shot at, you or your defenders can shoot back. That’s mandate for all the ships participating in Prosperity Guardian: they can shoot as soon as they see any threat emerging.”⁶⁰

Retired Vice Admiral Andrew Lewis, who until 2021 commanded the US Navy’s Second Fleet and in an earlier posting commanded the US Navy’s Carrier Strike Group 12, described the situation as follows.

The Houthis’ attacks are essentially a culmination of the threats we’ve seen over the past 15 years. At the beginning of that period, we broadly saw terrorist and piracy threats. As things progressed, we saw the Houthis become more active. As recently as nine years ago, when I was a carrier strike group commander, we were intercepting Iranian convoys of dhows that were transiting to either Oman or Yemen to go to Yemen with the weaponry the Houthis are now using to target vessels in the Red Sea and Bab el-Mandeb Strait. For a period of time, we intercepted these convoys and forced them to turn around, so the equipment wasn’t flowing through, but they continued to build up that capability, and that is the result we’re seeing now.⁶¹

The fact that there was no global body policing Iran’s shipments of weapons through the Red Sea thus became the source of the dramatic threats to shipping in the Red Sea once the Houthis acquired enough weaponry to launch their attacks.

Indeed, despite the launch of Prosperity Guardian, the Houthis’ attacks accelerated. On December 26, for example, US naval vessels and aircraft in the Red Sea shot down twelve one-way attack drones, three anti-ship ballistic missiles, and two land-attack cruise missiles within a period of ten hours.⁶² Such lack of success would convince a conventional adversary to give up. But the novel aspect of the Houthis’ campaign against shipping is not just their comparatively modern weaponry (including the fact that they’re the first non-state group to have fired anti-ship ballistic missiles) but also that the ability to harm merchant vessels is secondary in their cost-benefit calculus. “The difference between piracy and the Houthis is that piracy is criminality. It’s to make money,” said retired Vice Admiral Duncan Potts, who until 2018 was the UK armed forces’ director general of joint force development and previously commanded the EU’s ATALANTA counter-piracy mission. “And like any other business model, if the cost and the risk gets too high, you just move elsewhere. But for the Houthis the attacks are not about money.”⁶³ The Houthis’ priority is not even to sink vessels, which is what a traditional adversary attacking vessels would intend. Instead, their top priority has turned out to be to gain global attention and to cause fear among shipping companies, their insurers, and their customers, and thus to gain a global platform.

The Houthis’ cost-benefit calculus also differs from that of the West’s traditional adversaries, as they primarily use cheap drones and missiles. An often-quoted cost per Houthi missile is $2,000. Simon Lockwood, head of shipowners at Willis Towers Watson, noted that it is these weapons’ relative lack of sophistication that—together with the Houthis’ sloppy research—causes the most fear in the shipping industry. “How do you cause a massive amount of disruption? You just create that level of uncertainty that causes companies in the maritime industry to say, ‘we can’t go into the Red Sea,’” he said. “If I were that way inclined, I would laud the Houthis’ ability to create absolute mayhem with relatively unsophisticated weapons, just to scare off merchant vessels.”⁶⁴

However, the Houthis’ current weapons are a significant improvement from the weaponry used by militias in the early 2000s. The Limburg was attacked by a suicide bomber driving an explosive-laden small boat into the vessel’s hull. Today, by contrast, the Houthis have sophisticated missiles as well as relatively simple drones. “Improvements in technology are a key reason these attacks are happening,” Ringbakken noted. “When I started in this job and even ten years into the job, my experts were telling me that for groups of terrorists and others to hit a moving target like a vessel is extremely difficult. Now the Houthis have proved that it’s quite easy. There’s technological development in targeting technology that has made it possible for groups like the Houthis to drag their equipment around on a lorry and then target and hit a ship far away out in the sea. That was not possible a decade ago.”⁶⁵ Even the best of these missiles and drones don’t reach the technological sophistication of those used by first-rate armed forces, and the Houthis’ drones only hit ships randomly. But the combination is powerful. “The Houthis’ weapons are a mix of very, very advanced missiles and very, very cheap drones. It’s dangerous cocktail,” Wang said.⁶⁶ The fact that a non-state group that has signed no maritime conventions and feels bound by no maritime rules has access to this dangerous cocktail is a serious threat to global shipping.

Indeed, the drones and missiles cause fear among shipping companies, and thwarting them requires far more sophisticated—and far more expensive—technology. Offensive missiles don’t need to be very precise, at least if the attacker’s objective is not to harm specific targets. By contrast, defensive missiles—whose task is to shoot down the offensive missiles—must be extremely precise. US Navy defensive missiles cost, on average, between $1.5 million and $2.5 million each.⁶⁷ For the Houthis, $2,000-a-piece missiles supplied by Iran are a bargain, especially because the missiles spread fear in the shipping industry, regardless of whether they hit their intended target.

Despite Operation Prosperity Guardian’s efforts, the Red Sea has become too risky for many shipping lines and their insurers. By late December 2023, shipping traffic through the Red Sea had decreased by nearly 20 percent.⁶⁸ On January 3, the United States, UK, Germany, Italy, South Korea, and several other Western countries (and, again, Bahrain) issued a stern statement, warning the Houthis of consequences should the attacks continue:

Ongoing Houthi attacks in the Red Sea are illegal, unacceptable, and profoundly destabilizing. There is no lawful justification for intentionally targeting civilian shipping and naval vessels. Attacks on vessels, including commercial vessels, using unmanned aerial vehicles, small boats, and missiles, including the first use of anti-ship ballistic missiles against such vessels, are a direct threat to the freedom of navigation that serves as the bedrock of global trade in one of the world’s most critical waterways. These attacks threaten innocent lives from all over the world and constitute a significant international problem that demands collective action.⁶⁹

The Houthis—logically, according to their cost-benefit calculus—responded with a highly complex attack comprising Iranian-designed one-way attack drones, anti-ship cruise missiles, and an anti-ship ballistic missile.⁷⁰ Shooting them down required the efforts of F/A-18s from USS Dwight D. Eisenhower, USS Gravely (DDG 107), USS Laboon (DDG 58), USS Mason (DDG 87), and the Royal Navy’s HMS Diamond (D34).⁷¹ The fact that Iran supplies the drones and missiles and, in some cases, intelligence to the Houthis, is well-known both to maritime executives and to Western militaries. It would, however, be legally dubious and highly risky for Western armed forces to militarily punish Iran for the Houthis’ attacks. “The maritime domain is unfortunately a welcome arena for escalation without making it state to state,” Ringbakken said.⁷²

Indeed, the Houthis have demonstrated that they can keep escalating because the United States and other Western allies are loath to retaliate against Iran. On January 11, the United States and UK, supported by Australia, Bahrain, Canada, and the Netherlands—operating as part of a new coalition operating in parallel with Prosperity Guardian—launched strikes against Houthi targets in Yemen. “These strikes are in direct response to unprecedented Houthi attacks against international maritime vessels in the Red Sea—including the use of anti-ship ballistic missiles for the first time in history,” President Joe Biden said in a statement. “These attacks have endangered US personnel, civilian mariners, and our partners, jeopardized trade, and threatened freedom of navigation.”⁷³ Further strikes have followed; by the end of February, the United States and the UK had carried out strikes on an almost daily basis.⁷⁴

Not even this punishment has convinced the Houthis to end their attacks. In early 2024, they instead expanded the scope of their attacks, targeting vessels linked to the United States and the UK in addition to those linked to Israel. On January 18, for example, they launched two anti-ship ballistic missiles against a Marshall Islands-flagged, US-owned, Greek-operated tanker.⁷⁵ Since then, the United States and the Prosperity Guardian allies have thwarted Houthi drones, missiles, and anti-ship missile attacks on an almost daily basis, while the US- and UK-led strike coalition has continued its strikes against strategic installations in Houthi-held Yemeni territory.⁷⁶

As before, the Houthis decide what constitutes links to the countries concerned, which puts every vessel at risk of attack. “We can disagree with them and argue that a ship they’ve attacked is not linked to one of these three countries, but once the rocket has hit your ship, it’s too late,” Ringbakken noted.⁷⁷ Lockwood added, “US links, UK links, Israeli links: that’s rubbish. The attacks are about targeting shipping for effect, and it’s crippling shipping.”⁷⁸ By April 2024, sixty-five countries’ interests had been affected by the campaign, according to the US Defense Intelligence Agency.⁷⁹ Only ships linked to Russia and China have appeared safe. Indeed, in an effort to keep their vessels safe, by the beginning of 2024 some captains had adopted a strategy of incorrectly communicating to the Houthis that they had an all-Chinese crew. On February 19, the EU announced the formation of another naval mission in the Red Sea. Operation Aspides, comprising France, Germany, Italy, and Belgium, would protect merchant vessels alongside Prosperity Guardian and the strike coalition.⁸⁰ The Houthis, meanwhile, appeared to continue sparing any vessels linked to Russia and China.⁸¹

By March 2024, forty merchant vessels had been successfully attacked, thirty-four of which had sustained damage.⁸² A few weeks later, the rate of Houthi attacks appeared to have slowed. “Their pace of operations is not what it was,” US Air Force Lieutenant General Alexus Grynkewich, the top US Air Force commander for the Middle East, told a press conference.⁸³ Grynkewich attributed the slowdown to the effect of the US strikes, which had curtailed the Houthis’ arsenal of drones and missiles.⁸⁴ Crucially, despite a reduced arsenal, the Houthis appeared undeterred and kept up their missile and drone strikes. The US Central Command, communicating through its Twitter (X), reported Houthi attacks on a near-daily basis.⁸⁵ Yet the United States seemed to have little confidence the strikes would fundamentally improve security for Red Sea shipping. Grynkewich told reporters that Iran’s continued supply of weapons was a “complicating factor.”

Indeed, in the second half of April, the attacks increased again. On April 26, for example, the Houthis launched three anti-ship ballistic missiles from Yemen into the Red Sea, where they nearly hit one vessel and struck another, an apparently erroneously targeted suspected shadow vessel.⁸⁶ By the end of the month, the US Navy and allies had shot down Houthi drones and missiles or struck Houthi installations around 130 times, according to publicly known numbers.⁸⁷ An exact figure of how many vessels have been targeted by the Houthis is impossible to establish, precisely because the Houthi attacks are vague and may not always hit a vessel, though the attacks are always successful in spreading fear.⁸⁸ Without Prosperity Guardian’s defense of merchant vessels, the harm to vessels would, of course, be far more extensive. The number of vessels available to attack had also dropped significantly as Western-linked vessels’ owners were diverting them to the Cape of Good Hope route. By the end of February, traffic in the Suez Canal (and thus the Red Sea) had dropped by 50 percent.⁸⁹ By contrast, Red Sea traffic by Chinese merchant vessels rose by 73 percent between October 2023 and March 2024, compared to the same period one year earlier.⁹⁰ “The fact that you’ve got so many ships now avoiding the area tells you everything,” said Guy Platten, secretary general of the International Chamber of Shipping. “We absolutely welcome Operation Prosperity Guardian and the EU naval forces, because their presence does provide some sort of protection, but you can’t get every ship. But what does this mean for seafarers? These ships have crews, they’re not just inanimate objects. Nobody wants to risk their lives, and owners also have a responsibility and a duty of care for the seafarers on their ships.”⁹¹

The attacks have an effect on seafarers far beyond the ones working on vessels that have been struck by the Houthis—and, thus, on the globalized economy. “Shipping depends absolutely on its crew,” Roberts noted. “People have compared being a member of crew to being in prison, but with worse internet. It’s just not a great life. They don’t get many breaks, they get criminalized at the drop of a hat. It’s really not very attractive. And then on top of that, now you’ve got attacks on vessels. If you haven’t got crew and you haven’t got security, then the supply chain isn’t going to work for you. There’s got to be some serious thought given to this. If the crews don’t want to go, then nothing happens.”⁹²

Indeed, the global shortage of seafarers is becoming so severe that, if not enough of them are willing to crew ships having to pass through perilous waters, ships risk being unable to leave port. “There’s a limited number of people in our navies who could be drafted in to help on commercial ships,” Roberts said. “And would they be willing or able or allowed to do that? Governments would have to set priorities and start with the oil tankers and absolutely vital food. Luxury goods traveling on container ships, not so much. What is the appetite for consumer goods when you’ve got a threatened environment?”⁹³

The Houthis have continued their attacks despite paying a significantly higher price, measured in damaged or destroyed infrastructure in Houthi-held Yemeni territory. By April 2024, the militia appeared to have expanded its campaign into the Indian Ocean, to which the Gulf of Aden’s eastern end is connected but which is located several hundred nautical miles from the Red Sea. On April 26, the militia struck the MSC Orion, a container ship sailing under the flag of Madeira, off the coast of Somalia.⁹⁴

Then, on May 2, the militia announced it was expanding its attacks to the eastern Mediterranean. “We will target any ships heading to Israeli ports in the Mediterranean Sea in any area we are able to reach,” Houthi military spokesman General Yahya Saree said. He added that the decision would be implemented “immediately, and from the moment this statement is announced.”⁹⁵ By the end of June, no such attacks had occurred, but the Houthis kept up their attacks in the Red Sea and surrounding waters and expanded their arsenal. On May 13, EUNAVFOR Aspides reported that it had escorted 100 vessels since its inception less than three months earlier.⁹⁶ On May 28, the Marshall Islands-flagged bulk carrier Laax was hit—twice.⁹⁷ In June, the Antigua and Barbuda-flagged cargo ship Norderney was hit.⁹⁸ Five days later, a Liberia-flagged, Greek-owned coal carrier was hit so badly that its crew had to be evacuated, with one member unaccounted for.⁹⁹ Two days after that, another vessel reported two explosions nearby—apparent failed attempts to hit it.¹⁰⁰ As the attacks continued, the Houthis expanded their arsenal. On June 23, the militia reported having attacked a Liberia-flagged bulk carrier, this time using not flying drones or missiles but an uncrewed boat (which can also be referred to as a waterborne drone).¹⁰¹ Four days later, another Houthi uncrewed boat attacked a vessel, this time a Malta-flagged bunker.¹⁰² The Houthis’ use of uncrewed boats continued in July. On July 20, for example, an uncrewed boat appearing to be loaded with explosives approached a Liberian-flagged vessel the Houthis subsequently described as American. Armed guards onboard the merchant vessel managed to repel the attack.¹⁰³ In the subsequent 24 hours, US forces destroyed four such boats.¹⁰⁴ DNK and other maritime companies had been predicting this expansion, especially because the Houthis were already using airborne drones. The expansion also continued along the path of ever more sophistication. On June 26, the Houthis claimed to have struck another vessel with a hypersonic missile, a highly sophisticated weapon heretofore not used by militias.¹⁰⁵

Because modern merchant vessels are sturdy, even the successful attacks caused mostly minor material damage. They did, however, have a human toll. At the time of writing, the attacks have cost four seafarers their lives, and many seafarers whose ships were attacked have been left traumatized.¹⁰⁶ On June 25, the Philippines—the world’s leading provider of seafarers—announced it was considering banning its nationals from serving on vessels transiting the Red Sea.¹⁰⁷ While such plans are hardly surprising, they will further harm Western ships, as Philippine seafarers overwhelmingly crew Western-linked vessels, while Russian and Chinese vessels are primarily crewed by Russian and Chinese nationals.

The attacks have also continued to illustrate the Houthis’ inaccuracy in targeting (and their faulty due diligence). On April 26, for example, they struck the Andromeda Star, a vessel owned in the UK, flagged in Panama, and operated in the Seychelles.¹⁰⁸ On May 18, they struck the M/T Wind, a Greek-owned, Panamanian-flagged oil tanker. The two were, however, hardly Western vessels; they’re part of the dark fleet carrying Russian oil. In another illustrative turn of events, Western coalition ships in the Red Sea came to their aid.¹⁰⁹

Measured in the cost-benefit term of vessels hit by strikes compared to losses and damage to the attacker side, the Houthis’ campaign has, as we have seen, largely been a failure. Indeed, traditional armed forces would likely have ceased their attacks after such an increase on the cost side of the cost-benefit calculus. Yet the Houthis have not only kept up their campaign but expanded it. This again illustrates how the Yemeni militia reacts differently than traditional armed forces because it uses a different cost-benefit calculus. From the Houthis’ perspective, the benefit is not the number of vessels destroyed or severely damaged, but the inordinate global attention and power the attacks generate. The militia appears to measure cost purely in monetary expenses for its weaponry, and that cost is modest. In the Houthis’ calculus, the cost in number of targets missed, environmental damage in Yemeni waters, and infrastructure destroyed by US-UK airstrikes appears to be marginal. Attacks on shipping “are a great weapon that can be used, for want of a better expression, to prevent or effect change in a particular area or cause damage to other nations and to shift the order of the world,” Lockwood said. “That’s the real danger that we face with the Houthis.¹¹⁰” Captain (Navy) Niels Markussen, the director of NATO’s Shipping Center, added

The Houthis’ capability appears to have been reduced to around 50 percent as we speak [in March 2024], but they still have the will to continue as long as we’re not taking over their territory with land forces, which we’d have to do to prevent them from using their coastline to launch attacks. Western and allied navies can do what they’re doing right now, they can lie outside the coast and they can protect ships, they can shoot down the drones and the missiles that are coming out, but some of these drones and missiles will get through, meaning that the Red Sea is not safe for shipping. We cannot guarantee safe passage through the Red Sea. And it’s that uncertainty that they will keep using against us.¹¹¹

The Houthis are so illustrative because they’re not a one-off campaign but represent a triply new threat to shipping. The militia is not an officially recognized state and doesn’t operate according to the same calculus as traditional armed forces. At the same time, it’s linked to a government that supplies it with a range of weaponry, including highly sophisticated kinds. Because the Houthis’ objective is to wreak havoc on Western-linked merchant shipping, it matters little how successful their strikes are. What’s more, because global trade is so intense, they can wreak havoc on not just shipping, but on the globalized economy. Wang summarized the predicament facing Western nations, the default protectors of global shipping.

Is the Western defense against incoming missiles sustainable? When you’re using two-million-dollar missiles to shoot down a drone worth a few hundred dollars, there’s a long-term problem. Of course, if you are attacked by a ballistic missile, you need to engage it with a very advanced missile. That’s the only way you can counter it. But the combination of advanced missiles and very, very cheap weapons is basically drawing resources from the Western coalition at a pace that’s not sustainable in the long run. When it comes to drones, it takes a lot of courage to wait and to engage a drone when it comes into gun range, which would be the cheap way of doing it. But if you have a warship worth a billion dollars, you need to engage the drone or missile as soon as you can in order to cope with the threat as far out as possible. So you will have to waste expensive missiles on drones in order to be safe on board. And that raises, you could say, a technological challenge that you have on warships today because all warships are filled with advanced missiles. That has been the rule of the game because to engage a peer adversary you need advanced missiles and you also need to have precision deep strike capability to engage the enemy ashore from the sea. So that part is still valid. But you need another way of dealing with cheap drones that is coming towards you.¹¹²

Indeed, as Wang had predicted, the Biden administration appeared to conclude that the Houthis—with their fundamentally different cost-benefit calculus—could not be defeated militarily. In April, the US government appeared to be trying to find a diplomatic solution with the Houthis. One such solution involved removing the designation as a terrorist group, which the United States had imposed in January 2024, in a quid pro quo that would see the Houthis cease their attacks. “We would certainly study that but not assume it’s an automatic thing,” Tim Lenderking, President Biden’s special envoy for Yemen, told news media.¹¹³

The shipping industry’s response

The shipping industry (including shipping lines and insurers) possesses centuries-long experience assessing new and growing threats. Lloyd’s Market Association, a large marketplace for underwriters, traces its origins to Edward Lloyd’s coffeehouse in central London, where from 1688 seafarers, bankers, and underwriters met to discuss business. Today the insurance industry maintains bodies like the Joint War Committee (JWC), which operates a list of so-called listed areas. In regular meetings and emergency sessions, the JWC’s members assess risky waters. The most dangerous ones are “listed,” which means that shipping operators must clear passage with their insurers before sending their vessels through them. About a week before Russia’s invasion of Ukraine, the JWC listed Russia’s and Ukraine’s parts of the Black Sea, as well as the Sea of Azov. In mid-December, the JWC expanded its listed parts of the Red Sea.¹¹⁴

Red-flagging bodies of water is a logical measure for the shipping industry: it creates a common basis on which a critical mass of the industry can act. The JWC’s listing of Black Sea waters and the Sea of Azov was followed by Russia’s 2022 invasion of Ukraine , which left no doubt that sailing through these waters was inadvisable.¹¹⁵ In cases short of war, where the case for not sailing may be less obvious, the listed designation prompts shipping companies and insurers to approach perilous waters with caution, which creates a somewhat unified industry response.

This is what has taken place since the Houthis’ hijacking of the Galaxy Leader. Some shipping companies have diverted all their ships away from the Red Sea to the route around the Cape of Good Hope, which adds some 10–12 days to a vessel’s journey and added logistical complexity involving the reception and delivery of cargo and arrival and departure of crews. Other shipping lines have diverted some of their vessels. In late March 2023, the Bab el-Mandeb Strait had a seven-day moving average of thirty-one vessels; one year earlier, the seven-day moving average was seventy-six vessels.¹¹⁶ In early April 2023, the Cape of Good Hope had a seven-day moving average of forty-three vessels; by early March 2024, the seven-day moving average was seventy-eight vessels.¹¹⁷

Avoiding risky waters is a feasible strategy in the short term, but it doesn’t solve the problem of the Houthis and other state-linked outfits targeting shipping. “If you just look at these rebels, whether their actions are backed by Iran or not, the impact they’re having on not just shipping in the Red Sea and the Gulf of Aden, but on global trade generally, is substantial,” Lockwood said. “It will lead to shortages, and it will have an inflationary impact on trade. It will also lead to opportunism among people who see an opportunity to push prices.”¹¹⁸

Indeed, the attacks will create a contentious debate across the shipping sector (and its clients) about what added costs are acceptable—the alternative being to stop shipping goods altogether—and who should pay for them. “You have commercial pressures,” Ringbakken noted. “You have cars on the way from China to be launched in the European market and [the client] saying, ‘you have to get the cars to the market.’ But as insurers, we have to assess the risk, and if the risk increases we increase the premiums, which increases the costs.”¹¹⁹ The costs haven’t become prohibitive, meaning they are not so high that customers opt not to ship their goods.

It’s quite expensive to go around the Cape, and the Egyptians are pretty good at calculating what the cost is to go through the Suez Canal. As an example, if you have a 65-million-dollar tanker [a tanker insured for a value of $65 million], that’s our average ship going through [the Red Sea and the Suez Canal]. She will pay one million dollars to go through the canal and it would pay $650,000 in war risk premium to go through. That makes it slightly cheaper to go around the Cape, but it’s also 16 days more.¹²⁰

By contrast, Chinese-owned and Chinese-flagged vessels, which are under no threat of attack, don’t face additional premiums in the Red Sea.

Indeed, it may only be when the number of total losses—vessels sunk or rendered unusable—begins accumulating that the Western shipping industry and maritime insurers will collectively opt out of the Red Sea route. By May 2024, there had been two total losses resulting from the Houthis’ attacks. Had modern vessels not been so sturdy, the total losses would have been significantly higher. And, added Ringbakken, “there’s of course a duty of care for the crew, and at some point most operators will have realized that there is a chance if not of being targeted at least of being subject to collateral damage.”¹²¹ Rerouting to the Cape of Good Hope, however, also brings additional expense. By April 2024, ports along the cape route had also reached, and in many cases surpassed, capacity as a result of the sudden influx of ships. As a result, vessels calling at these ports frequently need to wait for a berth, and storage yards struggle to handle the cargo.¹²²

The Houthis’ campaign against shipping is, in fact, brilliantly executed gray zone aggression (sometimes referred to as hybrid aggression). It causes real harm to the entities, people, and countries targeted, but—because it’s not a military aggression by a government—the targeted countries struggle to respond. The peril posed by the Houthis is not just that shipping in the Red Sea will continue to be dangerous. Their campaign also sends the message that the global maritime order is crumbling and those violating its rules can do so with impunity.

The lesson other militias and hostile states are likely to draw from the Houthi campaign is that a militia or hostile state can cause immense and immediate harm to countries through similar campaigns by groups that are not officially or technically armed forces. Wang notes that

in global maritime strategy, there has always been a strong focus on choke points—a narrow strategic important strait, like the Malacca Strait, the Strait of Hormuz, the Great Belt in Denmark, the channel area between Europe the UK, the Strait of Gibraltar and so on. And you also have choke points in the Northern Sea route [the route that leads from the Barents Sea near Russia’s border with Norway, along Russia’s Arctic coast and on to the Bering Strait]. And those chokepoints will always potentially be subjects for aggression against global shipping because it’s so easy to inflict the sea waves from the shore thanks to the short distance from the shore.¹²³

In the early 2000s, the Strait of Malacca—a crucial shipping lane located between Indonesia, Malaysia, and Thailand—experienced a spike in piracy, which subsided dramatically when Malaysia, Singapore, Indonesia, and Thailand began jointly patrolling the strait.¹²⁴ It and similar narrow, strategic bodies of water may see the emergence of militias backed by a state in the region, perhaps even ad hoc militias created to attack shipping for geopolitical purposes. The Strait of Gibraltar, the English Channel, and the Great Belt, all located between nations that maintain friendly relations, are less at risk of geopolitically motivated attacks on shipping. The Great Belt, however, is a crucial thoroughfare for “shadow vessels” going to and from Russia.¹²⁵ Such vessels could be used to harm regular shipping in the Great Belt and the neighboring Baltic Sea.

In each case, the attackers’ objective would not be to sink merchant ships but to frighten the shipping industry for geopolitical reasons—for example, to gain global attention or, in the case of separatist groups, to gain some kind of legal recognition. The Baltic Sea could, for example, see the emergence of a maritime-style Wagner Group that might officially simply operate merchant vessels but unofficially frighten other merchant vessels by its mere presence.

As with the Houthis, such groups’ cost-benefit calculus is likely to fundamentally differ from that of traditional armed forces. Indeed, states with hostile intentions could create proxy groups to harm merchant vessels associated with other countries. Similarly, China could expand its use of maritime harassment by making it more frequent, using it in more areas, or both, and other countries could decide to similarly send geopolitical signals by dispatching inspection flotillas or initiate maritime harassment. Indeed, from China’s perspective, the Philippines engages in maritime harassment in parts of the South China Sea that Beijing considers Chinese waters, though the Philippines and other governments consider the waters Philippine.¹²⁶

As we have seen, the Houthis’ attacks are just the most dramatic example of geopolitically linked forms of aggression currently facing global shipping. If these forms of aggression are not deterred, they will continue to grow in quantity and will be joined by new forms. In the immediate term, such aggression will pose a threat to shipping operations in affected waters. In the longer term, it will also threaten functioning of the global maritime order, which depends on a critical mass of countries and other entities—whether they be militias or shipping companies—respecting maritime rules. If such compliance with maritime rules can’t be taken for granted, shipping lines and other companies involved in global shipping will be wary of sailing through certain bodies of water. This would harm not only countries located adjacent to such bodies of water but the entire conduct of global shipping.

Improving strategies to counter attacks on shipping

When the Houthis attacked the Central Park, it was clear that the countries trying to protect the global maritime order were facing a new type of adversary. This recognition among Western governments and maritime companies, though, was only marginally helpful, because it was entirely unclear what strategies Western governments could use against such an adversary. As we have seen, Western governments have struggled to establish an effective response to the Houthis’ attacks precisely because the Houthis are a new kind of adversary, whose logic differs from that of nation-states and traditional armed forces. Lewis notes:

If the Houthis were not an enemy, I would have an admiration for their strategy, but as it is I just have a distaste for their whole approach. They’re putting military forces, nation states, and industry at risk because they’re playing by different rules. How do you defend against this thing, how do you prepare to nullify it? It’s very costly for industry, and it’s very costly for militaries trying to enforce maritime rules. When it comes to the Houthis, we know who their backer is, Iran, so an extreme solution would be to hit it and all the military targets associated with it. But that would be too risky.¹²⁷

Indeed, hitting the state sponsor of every kind of aggression against merchant shipping would not only be highly risky, but would also quickly overextend the capacity of Western navies. The Russian and Chinese navies have not intervened against the Houthis’ attacks. This is regrettable from a maritime-order protection perspective but hardly surprising, given that both countries violate maritime rules in other ways.¹²⁸ They also seem to tolerate the Houthis’ attacks, which have—with the exception of a few cases of apparently misdirected attacks—spared vessels linked to Russia and China.

However, there are several steps Western governments and the shipping industry can take to at least partly blunt the impact of state-linked aggression against merchant vessels. They include the following.

Preemptive diversion of shipping

A yet-untried way to defang the Houthis and prospective similar attackers would be for a core group of governments and Western-based shipping companies and maritime insurers to declare that all merchant shipping linked (by flag, ship ownership, or cargo) to a core group of countries will be diverted. “As soon as you are away from the coasts, on the oceans, it’s much more difficult for paramilitary organizations to attack,” Wang noted. “The solution to the Red Sea attacks may be to collectively put everything on the southern route around the Cape of Good Hope.”¹²⁹

This kind of collective action would involve an extraordinary diplomatic effort to bring together enough countries—including flag-of-convenience states—as well as shipping companies and underwriters. But success in assembling such a coalition would produce significant power. The threat of shipping diverting to the Cape of Good Hope—not out of fear, but as part of a collective decision by a wide-ranging group of governments and companies in the shipping industry—would, in the case of the Houthis, turn the Yemeni militia from a self-proclaimed anti-Western fighting force into a force driving business away from the Red Sea, the Bab el-Mandeb Strait, the Gulf of Aden, and the Suez Canal. Such an undertaking would have to be led by the US State Department, the Egyptian government, or, given the number of EU-linked vessels affected, the European Commission. If the lead entity were to succeed in getting enough governments and companies to commit to the plan, it could present the plan as an ultimatum. In the case of the Houthis, given that the plan would leave the militia and its sponsor Iran isolated, Iran may well conclude that the Houthis’ campaign has achieved its objectives and force the Houthis to end it.

Intra-industry risk updates

Vessels would be helped by risk updates not just when sailing in waters such as the Red Sea that are known to be home to attacks, but also in waters where new attacks are being orchestrated. The International Chamber of Commerce operates a Kuala Lumpur-based organization called the ICC International Maritime Bureau (IMB), which is meant to function as a hub for maritime threat updates. But Peter Broadhurst, head of Inmarsat Maritime Safety, noted that updates logged with the IMB are often forwarded slowly and may not reach vessels at all.

The information is there. If you’ve got a ship that’s just been hit by a rocket, it’s got a crew on board, and they’ll want to abandon it. The nearest rescue is another vessel, either a military vessel that’s shadowing it or another commercial ship. Somebody needs to go and help these guys, and if you don’t tell them they’re not going to know.¹³⁰

Shipping companies and related firms could, he suggested, form an industry-funded outfit that would function as the hub for such updates.

Such a hub could be further aided by artificial intelligence (AI)-aided risk updates. Mature AI companies and AI startups could train artificial intelligence to detect anomalies in maritime thoroughfares and other strategic bodies of water and forward any anomalies—such as the accumulation of hardware or personnel in locations from which attacks could be launched—to the hub. After assessing whether the anomalies posed a risk to merchant vessels, the hub would alert shipping companies.

Use of directed-energy weapons

Directed-energy weapons use concentrated electromagnetic energy to “incapacitate, damage, disable, or destroy enemy equipment, facilities, and/or personnel.”¹³¹ The Congressional Research Service (CRS) notes that these weapons include high-energy lasers, which are used by “ground forces in short-range air defense, counter-unmanned aircraft systems, or counter-rocket, artillery, and mortar missions [and] could theoretically provide options for boost-phase missile intercept.”¹³² That makes these weapons—if they can easily be produced and used—an extremely cost-effective alternative to defensive missiles and, indeed, more cost-effective than missiles of the kind the Houthis use.¹³³ “If you can engage the enemy with laser weapons, you don’t have the logistics problem anymore because you can reload while you are at sea. It’s just a matter of having enough energy,” Wang said. “And that development of energy weapons is likely to be accelerated now as a result of the war in Ukraine, but definitely also as a result of the situation in the Red Sea.”¹³⁴ These defensive capabilities could also be developed as exportable, commercially procurable, standalone systems that commercial shipowners can procure and install on their fleets, which would enhance vessels’ defensive capability and, thus, lower risk and insurance premiums. For military customers, manufacturers could modify and enhance the weapons to meet military requirements such as increased power output and integration with other weapons.

For fiscal year 2024, the US Department of Defense has requested around $1 billion for unclassified directed-energy weapons. In a speech in January 2024, Vice Admiral Brendan McLane, the commander of the US Pacific Fleet’s Naval Surface Force, “called for a directed energy weapon to be deployed on every Navy ship.”¹³⁵ Such large-scale development, though, is likely to take some time. At the time of writing, only nineteen directed-energy weapons are installed on US naval vessels.¹³⁶

Selective protection dependent on flag registration

Countries sending naval forces to the Red Sea (and prospective future flashpoints) to defend merchant vessels could also announce that they will only protect vessels sailing under their flags. “To a certain extent, you can send naval vessels to the Red Sea in order to protect shipping,” Wang noted.” But it’s the same ships that are needed in the Indo-Pacific and in the North Atlantic and in the Baltic Sea and off the coast of Norway. When it comes to Western naval resources, it’s a zero-sum game.”¹³⁷ During the Tanker War, when the government of Kuwait asked the US government to allow Kuwaiti-flagged tankers—which were coming under attack—to be reflagged under US flag, Washington complied and provided the tankers with naval protection.¹³⁸

Western governments could declare that they will only seek to protect ships flagged in their countries, on the basis that shipowners that don’t commit to the rules of Western countries also can’t expect their protection. China and Russia, for example, have a history of only protecting merchant vessels sailing under their flags. Restricting protection would, however, do little for the general protection of the global maritime order, especially because the past several decades have seen the trend toward flags of convenience accelerate. In 2022, more than 70 percent of global ship capacity, as measured in deadweight tons, was registered under a foreign flag with beneficial owners and registries being in different countries, UN Trade and Development (UNCTAD) reports.¹³⁹ Only 0.9 percent of merchant vessels (measured in deadweight tons) sail under US flag, 0.5 percent sail under UK flag, and 0.3 percent sail under German flag. The three largest flag states are Panama and Liberia, with more than 16 percent each, and the Marshall Islands with 13.2 percent.¹⁴⁰

Indeed, trying to reverse the shipping industry’s pervasive use of flags of convenience while, at the same time, trying to protect shipping against state-linked attacks would likely be impossible. “If you look at all our economies in the West, irrespective of where the vessels are flagged, the goods they are transporting are fundamental to our economy,” said Potts, who has commanded the US-led Coalition Task Group in the northern Gulf and has also commanded NATO’s High Readiness Force (Maritime).¹⁴¹ He added:

In the Red Sea, Persian Gulf, and Strait of Hormuz region, historically we used to say we’re absolutely flag blind about who we’re protecting. Because the West, all our economies, rely on freedom of navigation for global trade and the well-being of our economy. Whether you’re Marshall Island-flagged or US-flagged or UK-flagged or Greek-flagged or anything else, we would treat them exactly the same because it’s only when the whole system works that the shipping works.¹⁴²

And, Potts noted, “Often the cargo is more valuable than the ship. Who owns the cargo? Where’s it going? Who’s insuring it? Who owns the ship? With many ships, you can identify several different countries who have a stake in the ship and should take responsibility.”¹⁴³

Freedom-of-navigation operations

In freedom-of-navigation operations (FONOPs, also known as FON operations or FON assertions), a country’s naval vessels underline the importance of innocent passage by sailing through waters over which another country wrongfully claims jurisdiction or otherwise tries to interfere with civilian traffic. FONOPs are regularly conducted by the Royal Navy, and especially the US Navy, as a constabulary measure to protect the global maritime order.

In the South China Sea, the US Navy now regularly undertakes FONOPs through waters that are internationally recognized as belonging to the Philippines or other countries but are claimed by China under its “nine-dash line” policy. Noted retired Rear Admiral David Manero, a former US defense attaché to Russia and the UK, respectively, said, “In order to be successful doing freedom and navigation operations, you have to be consistent, and your messaging has to be on, and it has to always be refined. Imagine taking that whole message among several nations and coordinate it. This is why we’re doing it, citing the law of the sea. But it involves a great deal of coordination.”¹⁴⁴

To date, FONOPs have rarely been conducted in response to state-linked attacks on merchant vessels, simply because such attacks have been so rare. The US Navy has, however, conducted FON-related operations in the Strait of Hormuz and in the Bab el-Mandeb. The latter challenge Yemen’s requirement for foreign warships and nuclear-powered vessels to obtain Yemen’s permission prior to transiting its territorial waters. The United States also regularly conducts FONOPs in the South China Sea.¹⁴⁵ There would be little point conducting FONOPs against attackers like the Houthis because they don’t represent nation-states and have such a different cost-benefit calculus. FONOPs would, however, be useful against inspection flotillas, should China or other countries begin to regularly deploy such flotillas in internationally disputed waters. In practice, such FONOPs would need to involve the US Navy or the Royal Navy, as other Western governments would be hesitant to lead such operations.

Yet it would be illusory to think that the US and UK navies could conduct simultaneous FONOPs around the world and, in essence, provide a global maritime constabulary. This would stretch the two navies’ resources beyond the breaking point. In the Taiwan Strait, FONOPs would also involve the risk of confrontation with the world’s largest navy, that of China, “with a battle force of over 370 platforms, including major surface combatants, submarines, ocean-going amphibious ships, mine warfare ships, aircraft carriers, and fleet auxiliaries.”¹⁴⁶

Indeed, the attacks against, and harassment of, merchant vessels have reached a quantity that key Western navies would struggle to tackle. The Royal Navy, for example, has some eighty vessels, but only twelve of them are frigates, while eight are offshore patrol vessels and six are destroyers.¹⁴⁷

Disrupting the delivery of weapons

As previously noted, the US Navy has long tried to interdict weapons supplies being shipped to the Houthis. Indeed, it began doing so long before it was evident that the militia would use the weapons to attack shipping. Now that it’s clear the weapons are being used not just in Yemen’s civil war but also to harm global shipping, the United States and its allies could ramp up these efforts. They could also announce they’re expanding such efforts to other weapons-smuggling operations. Until now, the smuggling has primarily harmed civilians in countries affected by civil war. But with the Houthis likely to inspire copycat attacks on shipping, disrupting the supplies of weapons and weapons components has gained additional urgency. “We need to really understand the Houthis’ supply chains and how the components for weapons that they then assemble get into the country,” Potts said. “It will be complex to map this, but it’s a practical step we can take.”¹⁴⁸ To map these supply chains, governments could also confer with the private sector, as some companies are likely to have information that could help governments establish a clearer picture.

They could also confer with AI companies that can track and trace movements of suspected arms components to Houthi-controlled areas of Yemen. Indeed, governments could establish cooperation with AI companies, especially with startups seeking to prove their technologies, to receive early indications of patterns suggesting potentially worrying developments involving other groups and states. Such collaboration would add to observations already provided by intelligence services.

Armed guards on board

When piracy increased heavily off the coast of Somalia in the early 2000s, many shipping companies responded by hiring armed guards. The Houthis’ seizure of the Galaxy Leader quickly prompted suggestions of armed guards onboard merchant vessels in the Red Sea. Guards on merchant vessels are, however, relatively lightly armed and would not be able to protect a vessel against trained militias like the Houthis. Indeed, because ship guards are not soldiers, they’re legally prevented from operating military equipment and would thus not be able to protect ships from missile and (most) drone attacks. They would likely also struggle to thwart a professionally executed hijacking of the kind the Houthis mounted against the Galaxy Leader. This is illustrated by the fact that, even though ships in the Red Sea have increased “armed guards on board” signals since the Houthis began their attacks, the attacks have continued.¹⁴⁹ In addition, armed resistance against a seizure attempt by a militia would risk escalating into a situation in which navies would feel compelled to intervene.

Western countries could, however, offer vessels protection by law-enforcement officers. Such officers’ task could be defined as defending the cargo rather than the ship. That would mean the exporting or importing country could offer embarked law enforcement that would be able to employ military or quasi-military defensive capabilities. The United States has tried this concept: the Navy and Marine task force that was deployed to the Strait of Hormuz in August 2023 included the offer of servicemembers embarking on merchant vessels if the vessels’ owners and managers requested such protection.

Conclusion

Since the beginning of the nineteenth century, the world’s nations have gradually built a set of rules and agreements that allows merchant shipping to operate without constant fear of attacks by hostile states. They have done so because nations’ economies—at least since the Industrial Revolution—rely on global shipping.

The Houthis’ attacks in the Red Sea, however, have introduced a new threat to merchant shipping: geopolitically connected attacks that are linked to a hostile state but not carried out by it. The Yemeni militia has, in fact, demonstrated that building up a capacity to act in the maritime domain is possible for a non-state actor with no maritime tradition. The fact that the Houthis are not the armed forces of an internationally recognized country and operate with a completely different cost-benefit calculus than traditional armed forces make them such a fierce threat to global shipping. So does the fact that they use more sophisticated weapons than previous generations’ militias have had at their disposal, and that the weapons are inexpensive and attractive to use. Other militias (including ones yet to be formed) will likely want to copy the Houthis’ successful concept in other maritime chokepoints and heavily trafficked waters.

For the global shipping industry (except vessels linked to Russia and China, which the Houthis exempt from their attacks), this means that a neutral sector can be severely harmed and disrupted, at great expense to the shipping industry. The Houthis’ different cost-benefit calculus means retaliating against their strikes has little effect on their motivation. The harm to seafarers as a result of the Houthi attacks now presents an additional problem for Western shipping companies and, thus, global supply chains. So far, the shipping industry has managed to recruit seafarers—these days, predominantly from India, the Philippines, and Indonesia.¹⁵⁰ If attacks continue, shipping’s already precarious recruitment situation will worsen significantly. “Who wants to work in a war zone?” Broadhurst asked. “Unless we can protect seafarers, how can global trade continue?”¹⁵¹ At the end of June 2024, the Philippine government banned Philippine seafarers from working on ships that had been attacked in the Red Sea and the Gulf of Aden.¹⁵²

Instead, Western governments and the shipping industry will need to use means other than traditional military force to reduce the pain caused by the Houthis (and prospective future attackers of a similar kind). These efforts—including the preemptive threat of collective rerouting away from perilous waters and the use of direct-energy weapons—will require public-private collaboration. Western governments and shipping companies could start by announcing that they are increasing their collaboration beyond the immediate needs in the Red Sea. This would signal to prospective attackers that Western governments and companies are prepared for new maritime gray zone aggression and will have a better strategy to thwart it than has been the case in the Red Sea.

About the program

The Transatlantic Security Initiative, in the Scowcroft Center for Strategy and Security, shapes and influences the debate on the greatest security challenges facing the North Atlantic Alliance and its key partners.

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Image: A Standard Missile Three (SM-3) is launched from the guided missile cruiser USS Shiloh (CG 67) during a joint US Missile Defense Agency, US Navy ballistic missile flight test in the Pacific Ocean. REUTERS/US Navy/Handout. REUTERS/US Navy/Handout.

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