Houthis extort up to $2 billion a year from shipping companies

The Houthis are extorting up to $2 billion a year from ships in the Red Sea and Gulf of Aden by charging shipping companies "protection fees", according to a new study. The unpublished study, conducted by a UN Security Council panel of experts on Yemen, found that the Houthis earned $180 million a month through this "charge" protection extortion tactic, though the panel was unable to independently verify that figure.

Since November 2023, the Houthis have carried out multiple attacks on commercial shipping in the Red Sea region, using drones, missiles and surface ships to attack ships, killing four people and sinking two vessels. The Red Sea is an important route connecting Asia, the Mediterranean Sea and the east coast of North America, connecting the Suez Canal in the north and the Gulf of Aden in the south. The Houthis claim to block only ships linked to Israeli Country, but research has found they have also attacked ships in pro-Houthi Country, including Iranian.

Shipping Companies' Countermeasures

Most major shipping lines have rerouted containerships and tankers to the longer T/T, rounding southern Africa via the Cape of Good Hope. This route takes 10 to 14 days more sailing time than the route through the Suez Canal, increasing transportation costs and delays. However, there are still some local and regional vessels that continue to operate in the Red Sea region. Among the major shipping companies, only French CMA CGM continues its regular voyages in the Red Sea region.

Importance of the Red Sea and the Gulf of Aden

Red Sea: Located between northeastern Africa and the Arabian Peninsula, it is an important waterway connecting the Indian Ocean and the Mediterranean Ocean. The Red Sea is not only a key passage for International, but also one of the main routes for oil transportation. The Suez Canal is located in the red The northern part of the sea is the shortest route connecting the Mediterranean Sea and the Red Sea, which greatly shortens the sailing time from Asia to Europe.

Gulf of Aden: Located at the southern tip of the Red Sea, it is an important waterway connecting the Red Sea and the Indian Ocean. The strategic location of the Gulf of Aden makes it an important node of global trade, especially for oil exporters in the Middle East.

Introduction to foreign trade terminology

• Container ship (Containership): A large ship specifically used to transport Container cargo, with efficient loading and unloading capacity and large cargo capacity.
• Tanker Vessel: A ship mainly used to transport liquid cargo (such as oil, chemicals, etc.), usually with special storage tanks and pumping systems.
• Cape of Good Hope Route: A route that bypasses the Cape of Good Hope in southern Africa and connects the Atlantic and Indian Oceans. This route is much longer than the route through the Suez Canal, increasing sailing time and costs.