March 26, 2024

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IntelBrief: Iran and the Houthis Issue New Threats to Commercial Shipping

Sepahnews via AP

The crisis in the Red Sea that has resulted from attacks by Yemen’s Houthi movement on commercial shipping has thus far proved impervious to U.S. diplomatic or military initiatives. Houthi attacks on commercial ships transiting the Red Sea, which began in mid-November as an effort to pressure global powers to halt Israel’s offensive in Gaza, demonstrate the ability of a non-state actor to exert an outsized impact on globally developed economies that depend on the freedom of navigation. Despite near-daily U.S. and allied interceptions of Houthi anti-ship missile and armed drone attacks and several rounds of significant strikes on the Houthis’ arsenals, in mid-March, the Houthis expanded, rather than narrowed, their threats to global shipping. On March 14, two Houthi spokesmen, Brigadier General Yahya Sare’e and Mohammed Abdulsalam, posted on social media that the Houthis would henceforth target ships linked to Israel traveling in the Indian Ocean on the way to the Cape of Good Hope at the tip of South Africa. To reduce their potential to be targeted, many commercial vessels traveling between Asia and Europe have been sailing around the Cape of Good Hope instead of going through the Bab Al-Mandeb Strait and the Red Sea. Experts assess that the Houthis are capable of attacking the Indian Ocean from territory they control: at least some of the missiles Iran has supplied the Houthis have a range of more than 650 kilometers (400 miles), and their Iran-supplied armed drones can travel up to 2,000 kilometers (1250 miles). Coincident with the expanded warning, the Houthis claimed to have tested hypersonic missiles, although the U.S. Department of Defense assessed the claim as “inaccurate.”

Several days after the Houthi announcement, the group’s main backer, Iran, issued a new warning of its own, couching the threat as a response to U.S. actions to enforce its sanctions on Iran’s energy sector. On March 19, the commander of the IRGC Navy, Rear Admiral Alireza Tangsiri, a hardliner, stated: "If our oil and tankers are seized anywhere in the world, we will respond in kind." He added that the era of “foreign exploitation of Iranian resources with impunity has come to an end.” Tangsiri's remarks followed by several weeks the U.S. diversion of the crude oil tanker Abyss, pursuant to a warrant by the U.S. Department of Justice, for violating U.S. sanctions on Iran’s energy sector. The Abyss, reportedly anchored in the Yellow Sea between China and South Korea, was carrying more than 520,000 barrels of Iranian oil. The Abyss seizure is part of a stepped-up U.S. enforcement of its Iran sanctions regime, in which U.S. authorities have succeeded in diverting several tankers carrying Iranian oil to divert to or remain in ports where authorities could take possession of the cargo. The IRGC’s designation by the United States as a foreign terrorist organization (FTO) in 2019 enhanced the ability of U.S. officials to use the threat of prosecution to pressure U.S. owners and operators of ships carrying Iranian oil to surrender their cargo. U.S. officials argue that Iran's oil proceeds are used for the benefit of the IRGC and its affiliates and can be seized to implement U.S. counterterrorism policy. U.S. military assets have not seized the ships by force. In 2023, U.S. officials received information from a hardline anti-Iran interest group that a ship, the Suez Rajan, then in East Asia, was transporting one million barrels of Iranian oil. U.S. authorities persuaded the ship to sail to Galveston, Texas, to surrender its cargo, which was sold for $74 million. In 2023, Iran retaliated for the Suez Rajan seizure by capturing two tankers near the Strait of Hormuz, including one with cargo for major U.S. oil company Chevron Corp. In January 2024, Iran seized the Suez Rajan itself, subsequently renamed St. Nikolas, in an IRGC-led raid while the ship was loading oil off the Iraqi port of Basra. Tangsiri’s threat came after the acting U.S. Special Envoy for Iran, Abram Paley, visited Panama to urge it to prohibit sanctioned Iranian ships from flying its flag – another facet of the overall U.S. effort to limit Iran’s oil sales.

Iran’s new threats to seize oil tankers might compound the difficulties facing the commercial shipping and global oil industry posed by the Houthi attacks in the Red Sea. Iranian actions against tankers, if implemented, will likely occur in and around the second of the region’s major sea chokepoints – the Persian Gulf and Strait of Hormuz. A crisis in the Strait, coupled with the ongoing hostilities in the Red Sea, would certainly alarm policymakers in Washington and European capitals, as well as leaders in Asia, that the region’s major sea chokepoints could potentially be blocked or disrupted, simultaneously, threatening their oil and gas supplies. Even though the global price of oil has only risen marginally since the Houthi attacks in the Red Sea began, Gulf energy officials have begun to warn that a failure to resolve the Red Sea crisis will soon start to affect the industry. On March 19, during an oil industry conference in Texas, Shaikh Nawaf Al-Sabah, the CEO of Kuwait Petroleum Corporation (KPC), warned of a shortage in the global tanker fleet if the Red Sea and other regional “disruptions” persist for another six months. He added that “[Kuwait] maintains a strategic tanker fleet for these types of reasons” and is “comfortable [it] can supply [its] customers in the quantities that are required on time without issue, but I don’t know how many other [major oil] producers have that strategic vision.” Yet, Shaikh Nawaf said he did not foresee “a supply fear,” adding he is “confident that the industry and the system is well equipped to handle potential supply crises that might happen.”

The compounding Iranian and Houthi threats to the free flow of commerce through the region can only increase the potential for U.S. escalation against the Houthis and the prospect of U.S.-Iran conflict that both countries have strenuously sought to avoid. Since Iran’s regional allies began attacking Israel, U.S. forces, and commercial ships in sympathy with Hamas and Palestinians in Gaza, many experts and members of the U.S. Congress have been calling for U.S. retaliation not only against Iranian proxy forces but against targets inside Iran itself. An Iranian attempt to disrupt the free flow of oil through the Persian Gulf is certain to amplify those calls, although concerns about Iran’s ability to sustain a long and expansive regional conflict with the United States will continue to constrain U.S. options. There are fewer repercussions to U.S.-led escalation against the Houthis. Any Houthi attack on ships in the Indian Ocean, particularly if the assaults result in damage or casualties, is sure to elevate U.S. official consideration of more aggressive actions against the Houthis to try to accomplish the deterrence that has, thus far, eluded the United States and its partners. The options experts have recommended include targeted attacks on Houthi leaders, similar to those used to significant effect against leaders of al-Qaeda, Islamic State, and, more recently, some high-ranking figures in Iran-backed Shia militia forces in Baghdad. Others assert the Houthi threat to the centuries-old U.S. commitment to preserve the freedom of navigation is significant enough to require U.S. action against the Houthi control over territory in Yemen. Those who take this position assert that only a threat to the Houthi grip on power in Yemen will suffice to cause the movement to climb down from its assaults on Red Sea commerce. Yet, the questionable effectiveness of any Yemeni partners on the ground in the country – and the widespread opposition to direct U.S. troop involvement in Yemen – might derail any decision to pursue a ground strategy against the Houthis.