Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The Pentagon has convinced more than a half dozen allies to join a strengthened naval task force in the Red Sea amid mounting attacks by Iran-backed rebels on commercial shipping that have driven oil prices higher.
The announcement of what Lloyd Austin, US defence secretary, called Operation Prosperity Guardian came just hours after UK oil supermajor BP said it was halting all shipments through the waterway, citing the “deteriorating security situation”. BP is a large producer of oil in Iraq and gas in Oman.
More than 9mn barrels a day of oil shipments, or almost a tenth of global demand, pass through the Red Sea, making it one of the world’s busiest energy chokepoints.
The naval deployments, which will include ships from more than a half dozen Nato countries, including the UK and France, as well as regional allies like Bahrain, come as Iranian-backed Houthi rebels in Yemen have increased their attacks on US assets in the region.
The Houthi attacks on commercial shipping, which rebel leaders said were in retaliation for Israel’s offensive against Hamas, have steadily increased in recent weeks, with more than 11 since mid-November. On Sunday, the US said one of its warships, the USS Carney, shot down 14 attack drones launched by the Houthis.
BP’s decision to bypass the Red Sea pushed oil prices higher on Monday, with international benchmark Brent settling up 1.8 per cent at $77.95 a barrel.
The new naval task force would work together “to tackle the challenge posed by this non-state actor launching ballistic missiles and uncrewed aerial vehicles at merchant vessels from many nations lawfully transiting international waters”, Austin said.
He will convene a virtual meeting of international partners in Bahrain on Tuesday to discuss the Houthi escalation.
“We’re taking action to build an international coalition to address this threat,” Austin said during a stop in Israel on Monday.
After visiting Bahrain, where the US Navy’s Fifth Fleet is stationed, the defence secretary will stop aboard the USS Gerald R Ford aircraft carrier, currently in the eastern Mediterranean, and also travel to Qatar.
Operation Prosperity Guardian would be formed as part of the 39-member Combined Maritime Forces and its existing Task Force 153, which focuses on the Red Sea, Austin said.
The expansion of the Red Sea task force comes amid a broader diplomatic effort by Washington. General CQ Brown, chairman of the US joint chiefs of staff, was also in Israel on Monday, following a visit by national security adviser Jake Sullivan last week. CIA chief Bill Burns also met with Qatari and Israeli officials to discuss the release of more hostages held by Hamas in Gaza.
During his visit to Israel, Austin said the country must be “more surgical” in its military campaign. He and his counterpart also discussed a shift in the Gaza offensive away from high intensity operations.
The US had not ruled out military action against Houthi targets if the attacks on ships continue, officials said. It would “take appropriate action . . . at a time and place of our choosing”, Sullivan said earlier this month.
Even before BP’s announcement, global energy suppliers and commercial shippers had been avoiding the narrow Bab el-Mendeb strait at the southern end of the Red Sea, where tankers sail within easy striking distance of the Houthi rebels.
BP’s pause came after commodity trader Trafigura said it was taking “additional precautions” for its owned and chartered vessels. Several of the world’s biggest shipping companies, including MSC, Hapag-Lloyd and Maersk, have also paused travel through the Red Sea due to security risks.
Traders are also anxious about threats to supplies of Qatari liquefied natural gas to Europe as winter sets in. The UK’s benchmark gas price jumped by more than 8 per cent on Monday, while the European hub price rose by more than 7 per cent.
The US has blamed Iran for enabling these attacks. Sullivan told Israel’s News 12 last week that it was Iran’s responsibility to end the threat.
Analysts said the attacks raised the prospect of a new and prolonged disruption to global energy and goods shipments, less than two years after Russia’s full-scale invasion of Ukraine — and sanctions on Russian energy exports — forced a reordering of decades-old oil and gas trade routes.
Raad Alkadiri, a managing director at Eurasia Group, said the move by big shippers, including BP, to bypass the Red Sea would heighten risks and costs.
“Firms have the option of using the longer and costlier route around the Cape of Good Hope,” he said. “The heightened political risks will add to underlying uncertainty about the outlook for oil supply and demand in 2024.”