Austin calls for Iran to cease support of Houthi attacks on international shipping.

US Secretary of Defense Lloyd Austin said during his meeting with Prime Minister Benjamin Netanyahu in Tel Aviv on Monday that Iran must stop supporting Houthi attacks on navigation freedom in the Red Sea. He also pledged continued military support for the Gaza war, stating that the US is leading a multi-national maritime task force in the Red Sea to maintain the principle of freedom of navigation. Austin emphasized the importance of stopping Iran’s support for Houthi attacks on commercial vessels.

He also expressed his commitment to Israel, mourning the innocent lives taken by Hamas and standing alongside families of those still missing in Gaza, including US citizens. Austin assured Israel of America’s unwavering support and promised to provide the necessary equipment for the country’s defense.

The mounting attacks by the Houthi militant group have disrupted maritime trade, leading global freight firms to reroute around the Cape of Good Hope to avoid the Suez Canal. The attacks were described as a response to Israel’s assault on the Gaza Strip.

Several major freight companies, including MSC, have begun to sail around Africa instead. These detours add costs and delays, compounding over the coming weeks. About 15% of world shipping traffic transits via the Suez Canal, the shortest shipping route between Europe and Asia. The war between Israel and Hamas has sent shockwaves through the region and threatened to cause a broader conflict.

The Red Sea attacks have demonstrated the ability of Middle Eastern paramilitary forces backed by Iran to disrupt global trade. Combined, the companies that have diverted vessels control around half of the global container shipping market. The crisis is broadening to include energy shipments as oil and gas giant BP and other oil tanker groups have paused transits through the Red Sea.

As a result, crude oil prices have risen and war risk insurance premiums are on the rise. Shipping supply will be tighter as cargoes travel longer, putting rates under strong upward pressure. Companies are rethinking their connections with Israel due to the attacks, with some temporarily stopping accepting Israeli cargo.

In conclusion, the Houthi attacks are impacting global trade and forcing companies to reconsider their shipping routes and connections with Israel. The situation in the region is complex, and the US is committed to supporting Israel while also maintaining the principle of freedom of navigation in the Red Sea.