--- title: The Costs the Houthis Are Poised to Inflict on the Global Economy description: If the Red Sea "blockade" by the Yemeni rebel group continues, the impact on consumers and on local states will be considerable. canonical: https://time.com/6548968/houthi-rebels-shipping-attacks-red-sea-disrupt-global-economy-costs/ author: Gregory Brew article:opinion: true article:content_tier: free article:published_time: 2023-12-19T05:00:00.000Z article:modified_time: 2026-08-04T07:50:40.208Z article:section: Ideas og:title: The Costs the Houthis Are Poised to Inflict on the Global Economy og:description: If the Red Sea "blockade" by the Yemeni rebel group continues, the impact on consumers and on local states will be considerable. og:url: https://time.com/6548968/houthi-rebels-shipping-attacks-red-sea-disrupt-global-economy-costs/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blted1579dd3ee86c39/698a4359d075339d6fe6eb17/cargo-ship-red-sea-suez-canal.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 og:image:width: 1024 og:image:height: 576 og:image:alt: Loaded containers stacked on top of a cargo ship sailing in a canal, Suez Canal, Red sea, Egypt og:type: article twitter:card: summary_large_image twitter:title: The Costs the Houthis Are Poised to Inflict on the Global Economy twitter:description: If the Red Sea "blockade" by the Yemeni rebel group continues, the impact on consumers and on local states will be considerable. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blted1579dd3ee86c39/698a4359d075339d6fe6eb17/cargo-ship-red-sea-suez-canal.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 ---  # How—and Why—Yemen’s Houthi Rebels Are Poised to Seriously Disrupt the Global Economy > Sponsored content. 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It explains how TIME's journalism is made, from the first pitch through the editorial decisions behind a finished story or cover. #### How can I read about how TIME chooses its covers? Inside TIME is the newsletter where TIME's Editor-in-Chief explains cover selection and the editorial reasoning behind major stories. It is free at time.com/newsletters. #### Who is the editor of TIME? Sam Jacobs is TIME's Editor-in-Chief. He writes Inside TIME, a twice-weekly newsletter about the newsroom's reporting and editorial decisions. #### Is Inside TIME free? Yes. Inside TIME is a free newsletter, available at time.com/newsletters. A paid TIME subscription is separate and available at time.com/subscribe-agent. ## Video: Is What’s Happening in Gaza a Genocide? Experts Weigh In [Watch (HLS stream): Is What’s Happening in Gaza a Genocide? Experts Weigh In](https://cdn.jwplayer.com/manifests/Wbb0b7sL.m3u8) (5:02)  _Published 2023-11-22. Three Palestinian human rights organizations filed a lawsuit with the International Criminal Court (ICC) to request arrest warrants against Israeli leaders—including Prime Minister Benyamin Netanyahu—for genocide. Scholars are torn on whether the current conflict can be yet classified a genocide officially. TIME spoke to several experts about the meaning of genocide and whether the current conflict could be labeled as such._ by [Gregory Brew](https://time.com/author/gregory-brew/) ## Gregory Brew Dec 19, 2023 5:00 AM UTC  Loaded containers stacked on top of a cargo ship sailing in the Suez Canal. Loaded containers stacked on top of a cargo ship sailing in the Suez Canal. Camille Delbos—Art In All of Us/Corbis/Getty Images by [Gregory Brew](https://time.com/author/gregory-brew/) ## Gregory Brew Dec 19, 2023 5:00 AM UTC After two months, the crisis in the Middle East is poised to seriously disrupt the global economy as well as regional stability—[thanks to the Houthis](https://time.com/6548183/yemen-houthi-rebels-red-sea-attacks-impact/), a rebel Shi’a group in Yemen, and their successful effort to disrupt shipping through the Red Sea. While attacks by the Houthis on commercial shipping began on [November](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwi-pvXz6ZmDAxVWlYkEHV2kAwIQFnoECBUQAQ&url=https%3A%2F%2Fapnews.com%2Farticle%2Fisrael-houthi-rebels-hijacked-ship-red-sea-dc9b6448690bcf5c70a0baf7c7c34b09&usg=AOvVaw2uwRb0YoOP2khYN4QvaSZJ&opi=89978449) 19, they escalated last week, with the Yemeni rebels firing [anti-ship ballistic missiles at several passing ships and hitting one](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjky5H96ZmDAxXUjIkEHeXLAxYQFnoECDQQAQ&url=https%3A%2F%2Fapnews.com%2Farticle%2Fyemen-houthi-ship-attack-israel-hamas-69289146266b9042b5896aa4679605ef&usg=AOvVaw1wWS5fTflpDWc%5FbqKgT2N0&opi=89978449) (the first time such a weapon has ever been used successfully). As none of the ships were bound for Israel or owned by Israeli companies, the attacks signaled the Houthis were stepping up their efforts to pressure local commerce as a way to force Israel to suspend its campaign in Gaza. Shipping companies got the message. [Five of the largest shipping firms](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiRwKSa6pmDAxW1rokEHa5oB3MQFnoECBcQAQ&url=https%3A%2F%2Fwww.reuters.com%2Fworld%2Fmiddle-east%2Fshipping-firms-avoid-red-sea-houthi-attacks-increase-2023-12-18%2F&usg=AOvVaw3nmGdlDBkIaOFDh7AXtKHN&opi=89978449) announced they would redirect their container ships away from the [Bab al Mandab strait](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjx8KGv6pmDAxW9q4kEHah8CCcQvOMEKAB6BAgiEAE&url=https%3A%2F%2Fwww.washingtonpost.com%2Fworld%2F2023%2F12%2F15%2Ftwo-maps-show-why-shipping-firms-are-suspending-routes-red-sea%2F&usg=AOvVaw2VgdY9J-9SidELBW6rRmbb&opi=89978449), the strategic waterway through which ships must pass on their way to the Suez Canal and which handles [over 10% of global commerce](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjumt3V6pmDAxVilIkEHZXiDn8QFnoECCsQAQ&url=https%3A%2F%2Fwww.cnn.com%2F2021%2F03%2F26%2Fafrica%2Fsuez-canal-importance-explainer-scli-intl%2Findex.html&usg=AOvVaw36Fy7SD9geA8p%5F-SZ9pNQg&opi=89978449). Following the announcement, [traffic through the Red Sea dropped by 35%](https://www.bloomberg.com/news/articles/2023-12-18/houthi-attacks-start-shutting-down-red-sea-merchant-shipping). Commerce hasn’t been blocked completely, [since most ships can opt for the longer but safer route around Africa](https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/shipping/121523-global-trade-at-risk-as-shippers-shun-red-sea-over-houthis-attacks), but the Houthis have increased the cost of shipping globally, imposing additional costs to commerce at a time [when trouble at the Panama Canal has already made shipping more complicated](https://www.nytimes.com/2023/11/01/business/economy/panama-canal-drought-shipping.html#:~:text=But%20a%20drought%20has%20left,about%20water%20use%20in%20Panama.) and central banks worry about a new inflationary spike. If the Houthi “blockade” continues, the costs to consumers and the impact on local states will be considerable. In the event that the Red Sea is closed long-term, Europe and states on the Mediterranean will bear the brunt of the damage. Some countries in North Africa, such as Tunisia and Algeria, are also particularly vulnerable as they do most of their Asian trade through the Suez Canal. Israel, the Houthis intended target, has suffered already as its [seen traffic through its southern port of Eilat come to halt](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjDuKCV7ZmDAxV4KlkFHX9VCiYQFnoECBIQAQ&url=https%3A%2F%2Fwww.middleeasteye.net%2Flive-blog%2Flive-blog-update%2Fisraels-red-sea-eilat-port-sees-maritime-traffic-stopped&usg=AOvVaw04cDHt-tWhCML7IQpc-vTh&opi=89978449), though the port’s relatively small size has made the overall impact fairly manageable. The big loser to a closed Red Sea is Egypt, which depends on transit fees through the Suez Canal for [as much as one-fourth of its currency earnings](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwj0%5Fav01ZmDAxX8g4kEHWpLBKoQFnoECDoQAQ&url=https%3A%2F%2Fapnews.com%2Farticle%2Fmiddle-east-africa-egypt-suez-canal-5ba733fcdfddc023e4fff07be5e9517e&usg=AOvVaw34UkS9cuEgIWnts7ctGFD6&opi=89978449). Already under strain from the humanitarian situation in Gaza and a [moribund economy](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwigtv2z7ZmDAxV-L1kFHYZ2BGcQFnoECBYQAQ&url=https%3A%2F%2Fwww.reuters.com%2Fworld%2Fafrica%2Fegypts-stumbling-economy-faces-new-pressures-gaza-crisis-2023-11-10%2F&usg=AOvVaw3xwVZcUzjZa7Th3bn-lMiE&opi=89978449), Egypt’s authoritarian President Abdel Fattah al-Sisi may face major financial pressure if traffic through the canal slows. A long-term disruption of traffic through the Red Sea will impact energy prices, particularly for consumers in Europe. About one-fifth of the traffic through the Suez Canal is oil, either on ships or sent across Egypt via the Sumed pipeline, with the [total volume of crude oil and refined products](https://www.eia.gov/todayinenergy/detail.php?id=61025#:~:text=Southbound%20shipments%20through%20the%20Suez,up%20from%2030%25%20in%202021.) shipped either way at nearly 9 million barrels per day (bpd), roughly 12% of total seaborne trade. A complete halt to oil shipments through the canal would be a significant disruption and would likely boost crude oil prices in 2024. That gets to the purpose of the Houthi attacks. While the group wants to show off their capabilities and boost their regional prestige, like their patron Iran, [the Houthis want to pressure Israel into ending its offensive in Gaza](https://www.fpri.org/article/2023/12/why-are-the-houthis-attacking-now/), and they’re likely to continue their attacks until that goal is realized. One way to do that is to increase international pressure on Israel, with the Red Sea acting as a pressure point, and it’s very likely the Houthis will continue their attacks for as long as Israel remains at war. ### More From TIME It may prove difficult to deter the Houthis through military force. Unlike [Hezbollah](https://time.com/6324011/hezbollah-israel-lebanon-hamas-war/), an Iran-backed group that faces a direct war with Israel, the Houthis are under little immediate threat, [having now reached the brink of victory in their decade-long war with Saudi Arabia](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwis4Yzj7pmDAxXMjIkEHa5lD6IQFnoECBAQAQ&url=https%3A%2F%2Fwww.crisisgroup.org%2Fmiddle-east-north-africa%2Fgulf-and-arabian-peninsula%2Fyemen%2Fcatching-back-channel-peace-talks-yemen&usg=AOvVaw0BHtpZAbs7Kc86NBNOLHsO&opi=89978449). That’s what makes this a challenging situation for both the U.S. and the international community. Ensconced in mountain fortresses and flush with funds, [the Houthis are heavily equipped with Iran-supplied arms](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiKl73z7pmDAxX5kIkEHQSFAiMQFnoECDwQAQ&url=https%3A%2F%2Fwww.iiss.org%2Fonline-analysis%2Fmilitary-balance%2F2023%2F10%2Flittle-and-large-missile-surprises-in-sanaa-and-tehran%2F&usg=AOvVaw2agkmiZEOB-6sNSeZfMtUh&opi=89978449), including accurate drones and [anti-ship cruise and ballistic missiles capable of hitting a moving ship hundreds of kilometers away](https://www.haaretz.com/israel-news/security-aviation/2023-12-12/ty-article-magazine/houthis-threaten-red-sea-shipping-with-groundbreaking-iranian-missile/0000018c-5aa4-df2f-adac-feadd7220000). Sitting on a large stockpile, they can keep up this campaign for a long time. This all factors into U.S. thinking, which is currently focused on [increasing the international naval presence around Yemen](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwicgdHS75mDAxW6EFkFHab7AOgQvOMEKAB6BAgNEAE&url=https%3A%2F%2Fwww.theguardian.com%2Fworld%2F2023%2Fdec%2F17%2Fus-to-announce-expanded-protection-force-for-red-sea-shipping&usg=AOvVaw0lQKNth3OywBwnhrG1UVGy&opi=89978449) so as to deter or intercept new Houthi attacks. [U.S. air strikes](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjR7rTF75mDAxWXElkFHZx6CTsQvOMEKAB6BAgNEAE&url=https%3A%2F%2Fwww.politico.com%2Fnews%2F2023%2F12%2F16%2Fus-strike-options-houthi-red-sea-00132160&usg=AOvVaw0UPCAmsSLqlKHJdkTMpNYY&opi=89978449), along the lines of the [“self-defense”](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiqwvnY75mDAxXbElkFHfj0A58QFnoECBYQAQ&url=https%3A%2F%2Fwww.reuters.com%2Fworld%2Fmiddle-east%2Fus-forces-attacked-iraq-airbase-respond-self-defence-us-officials-2023-11-21%2F&usg=AOvVaw1hejUco5ymcZhvoGnmnIyI&opi=89978449) strikes carried out in Iraq and Syria, would come nowhere near the kind of damage the group endured [during their war with Riyadh](https://www.cfr.org/global-conflict-tracker/conflict/war-yemen). A sustained air campaign would degrade Houthi capability, but that would go against the other key U.S. goal—preventing the regional crisis from escalating to the point that Iran becomes directly involved. Nevertheless, the Biden administration will feel increasing pressure to take action as long as these attacks and their disruptive effects continue. ## Transcript After a deadly Hamas attack on October 7th wanted Israel to declare war and begin a military offensive in Gaza thousands of civilians have been killed including children reading people around the world to question. Whether what is happening in Gaza is genocide. I have not seen the that the dots connected in such a way that the pain of decimating Famas is tantamount to flattening the entirety of Gaza. This is explicitly genocide old and one which we should reject very vigorously and the Sybaris most experts use the definition from the UN convention on the prevention and Punishment of the crime of genocide. It defines genocide as any of the following acts committed with intent to destroy in whole or in part a national ethnical racial or religious group as such a definition of genocide has legal implications Nora Eric hot is a human rights attorney who has helped bring a case against Israeli leaders for genocide and incitement to genocide to the international criminal court. Israel has told us its top military and political brass have told us that they have the intent to destroy a people the Palestinian people in whole or in part that their purpose of the campaign is not accuracy. It is destruction that they are then effectuating that with specific underlined where they have moved ethnically cleanse and forcibly removed the Palestinian population in the north of God's that's about 1.1 million Palestinians to the South where they are also not granted quarter, but even in the north imagine that not everybody can can leave that injured can't leave the elderly can't leave those were immobile can't leave and they are attacking the the hospitals there that would otherwise provide care in addition. There are attacking sources of water Palestinians are reporting that they are being starved because of a lack of access to food. They told Palestinians to move South and then began to bomb the South The humanitarian corridors any engagement with these facts on the ground leads to a conclusion that this is a genocide all campaign the families of the people who were kidnapped by Hamas and Israel on October 7th have also filed a claim of genocide with the ICC separately in both cases. There are statements on record by some people that would seem to indicate a preference for Destruction directly from those statements David Simon is the director of the genocide studies program at Yale University. I'm just about to Specifically to eat the battle plan and the the actions of the Israeli military bombing civilian areas struction infrastructure State Hospital either crimes against humanity or work. The international criminal court may have limited ability and or will to follow through on any action regardless of whether there is proof of war crimes or genocide in these cases and ability at this at this International level is actually far far more difficult to achieve than one would think it's Rife with political consideration, which impedes it absolutely clear that the ICC could find that all its funding has withdrawn its really offends the wrong people and international law often times is even counterproductive because it's imbricated in a dynamic of power. However that said it is also an effective tool when we need to transcend the political hurdles where we can't communicate basic atrocities of people. ```json [{"@context":"https://schema.org","@type":"OpinionNewsArticle","@id":"https://time.com/6548968/houthi-rebels-shipping-attacks-red-sea-disrupt-global-economy-costs/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/6548968/houthi-rebels-shipping-attacks-red-sea-disrupt-global-economy-costs/"},"headline":"How—and Why—Yemen’s Houthi Rebels Are Poised to Seriously Disrupt the Global Economy","datePublished":"2023-12-19T05:00:00.000Z","dateModified":"2026-08-04T07:50:40.208Z","description":"If the Red Sea \"blockade\" by the Yemeni rebel group continues, the impact on consumers and on local states will be considerable.","url":"https://time.com/6548968/houthi-rebels-shipping-attacks-red-sea-disrupt-global-economy-costs/","keywords":["Middle East","overnight","Israel-Hamas War"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/blted1579dd3ee86c39/698a4359d075339d6fe6eb17/cargo-ship-red-sea-suez-canal.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Gregory Brew","jobTitle":null,"url":"https://time.com/author/gregory-brew/"}],"articleSection":"Ideas","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/blted1579dd3ee86c39/698a4359d075339d6fe6eb17/cargo-ship-red-sea-suez-canal.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"Loaded containers stacked on top of a cargo ship sailing in a canal, Suez Canal, Red sea, Egypt","caption":"Loaded containers stacked on top of a cargo ship sailing in a canal, Suez Canal, Red sea, Egypt","creditText":"Camille Delbos—Art In All of Us/Corbis/Getty Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/ideas/","name":"Ideas"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/middle-east/","name":"Middle East"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/6548968/houthi-rebels-shipping-attacks-red-sea-disrupt-global-economy-costs/","name":"How—and Why—Yemen’s Houthi Rebels Are Poised to Seriously Disrupt the Global Economy"}}]},{"@context":"https://schema.org","@type":"VideoObject","name":"Is What’s Happening in Gaza a Genocide? 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