U.S. Defense Secretary Lloyd Austin has announced a new international effort aimed at thwarting attacks on commercial shipping in the Red Sea. These attacks have not only led to a rally in oil prices but have also burdened merchants with longer wait times and increased transportation costs.
In a statement issued late on Monday, Austin expressed concern over the recent escalation in reckless Houthi attacks originating from Yemen. He emphasized that these attacks pose a threat to the free flow of commerce, endanger innocent mariners, and violate international law. Furthermore, he emphasized the critical importance of the Red Sea as a waterway crucial to freedom of navigation and international trade.
To address this pressing issue, Austin revealed the creation of Operation Prosperity Guardian, a new naval initiative that will garner support from key allies such as the United Kingdom, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles, and Spain.
The attacks in the Red Sea have been carried out by Houthi militants, an Iranian-backed group based in Yemen. These attacks have surged following Israel’s war with Hamas, another Iranian-backed Islamist group.
As a result of these attacks, there has been a significant increase in oil prices. According to FactSet, Brent crude has gained 7.5% over the past week, and West Texas Intermediate crude has risen by 7%.
The impact of these attacks on shipping has prompted energy giant BP PLC to halt transits through the Red Sea. This decision aligns with other major shipping companies, including container shipping giants A.P. Moller Maersk and Hapag-Lloyd AG, who have stopped using the southern entrance of the Red Sea after their vessels were targeted.
This new international initiative seeks to address these challenges collectively and ensure the continued safety and efficiency of commercial shipping in the Red Sea.
