US set to strengthen international force to protect Red Sea shipping

The US is preparing to announce an expanded international task force to protect ships in the Red Sea as attacks on vessels by Iran-backed rebels in Yemen spark fears of disruption to energy supplies, pushing up oil and gas prices.

US defence secretary Lloyd Austin will travel to Bahrain on Tuesday where he will convene a virtual meeting of international partners to discuss the escalating threat posed to shipping by Houthi rebels, who say they are striking in retaliation for Israel’s offensive against Hamas.

Austin is expected to unveil the new mission, called Operation Prosperity Guardian, after the meeting, a US official said.

“We’re taking action to build an international coalition to address this threat,” Austin, currently in Israel, said on Monday. “We’re doing everything that we can to ensure freedom of navigation in the area.”

After visiting Bahrain, where the US Navy’s Fifth Fleet is stationed, the defence secretary will stop aboard the USS Gerald R Ford, currently in the eastern Mediterranean, and also travel to Qatar.

Austin spoke just hours after UK oil supermajor BP said it was halting all shipments through the Red Sea, citing the “deteriorating security situation” in the area. BP is a large producer of oil in Iraq and gas in Oman.

The BP news pushed oil prices higher on Monday, with international benchmark Brent trading up 2.6 per cent to almost $79 a barrel.

Austin’s mission comes as Washington ratchets up its diplomacy in the region after more than two months of war between US ally Israel and Hamas. Austin was joined in Israel on Monday by General CQ Brown, chairman of the US joint chiefs of staff. National security adviser Jake Sullivan was in Israel last week. And CIA chief Bill Burns has met with Qatari and Israeli officials this week to discuss the release of more hostages held by Hamas in Gaza.

To beef up their protections in the Red Sea, US officials have said they hope to bolster an international maritime task force that already patrols the waterway, through which pass more than 9mn barrels a day of oil shipments, or almost a tenth of global demand. The task force is part of a voluntary maritime partnership of 39 countries.

“What we’re trying to do is strengthen, bolster it and operationalise it in ways that perhaps it hadn’t been operationalised prior to these Houthi attacks,” said John Kirby, the US National Security Council spokesman, on Monday.

“They may be looking for stationary ships that can protect from missile or drone strikes or preventing the ship itself from being hijacked. Or they may want ships that will actually escort. The latter will be resource intensive,” said Mick Mulroy, a former senior US defence official who focused on the Middle East.

The US has not ruled out military action against Houthi targets if the attacks on ships continue, officials said. The country would “take appropriate action . . . at a time and place of our choosing”, Sullivan said earlier this month.

The US plan to beef up protections for vessels comes as global energy suppliers and commercial shippers begin avoiding the narrow Bab el-Mendeb strait at the southern end of the Red Sea, where tankers sail within easy striking distance of Yemen’s Houthi rebels.

BP’s pause to shipping through the Red Sea came after Trafigura, one of the world’s largest commodities traders, 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 just as winter sets in. The UK’s benchmark gas price jumped by more than 8 per cent on Monday, while the European hub price trade up by more than 7 per cent.

Houthi attacks on vessels have steadily increased in recent weeks, with more than 11 since mid-November. On Sunday, the US said once of its warships, the USS Carney, shot down 14 attack drones launched by the rebel group.

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 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.”

John Kartsonas, managing partner of Breakwave Advisors, said a number of shipping companies were already diverting vessels away from the Red Sea to avoid the new risk.

“If that persists for weeks or months, we should start feeling the impact on higher freight costs, potential delays in deliveries of goods and commodities and overall higher delivered prices,” he said.

“The impact will be bigger on container ships, followed by tankers and lastly dry bulk.”