US and allies brace for Houthi retaliation against airstrikes

(Bloomberg) Houthi rebels vowed to target US and UK commercial vessels a day after the allies launched airstrikes against the group in Yemen, fanning concern that the Israel-Gaza war is blossoming into the regional conflict with Iran that the Biden administration feared.

Western naval forces in the Red Sea were on guard for any retaliation from the Thursday (Jan 11) night airstrikes as Houthi leader Mohammed Ali Al-Houthi told tens of thousands of supporters in Sanaa that counterattacks were “imminent.”

Those comments in turn prompted a fresh warning from US President Joe Biden, who said he believes Iran does not want war and that he considers the Houthis a terrorist group. That suggests the United States might restore a terrorist designation revoked early in the administration. On Friday (Jan 12), a ship hauling Russian oil had a narrow miss with a missile fired from Yemen, according to the UK’s Royal Navy.

“I’ve already delivered the message to Iran – they know not to do anything.

“We will make sure that we respond to the Houthis as they continue this outrageous behavior, along with our allies,” Biden told reporters.

The back-and-forth prompted fresh worries that the round of allied airstrikes would fail to deter Houthi attacks on commercial vessels in the Red Sea, and that the turmoil that’s seen shipping companies route their vessels around the southern tip of Africa would continue unabated.

That would present a new set of challenges for Biden and allies that joined or supported the strikes, including the United Kingdom, which must decide to keep up their attacks – and risk new provocations of the Houthis’ main backer, Iran – or seek some other solution. Israel has said it won’t let up its attacks on Gaza in the wake of Hamas’s Oct 7 incursion – the Houthis’ initial justification for their strikes – and a diplomatic solution is unlikely.

Despite the escalating aggression, the strikes on Yemen will probably have a limited impact on the global economy, according to Ziad Daoud, chief emerging markets economist at Bloomberg Economics. The attacks are unlikely to draw Iran into the conflict directly, and shipping costs remain below their 2021 peak, he wrote in a note.

Oil prices rose after the airstrikes. Brent futures gained as much as 4.3% before paring their gains.

“Neither side is looking to have an all-out war, and they are badly mismatched,” Jon Alterman, a senior vice president at the Center for International and Strategic Studies, wrote in a note of the United States and Iran. “But that is not to say that the Houthis will stop attacking shipping, or that the United States will stop attacking the Houthis.”

Of the more than 100 precision-guided weapons fired at Houthi targets, more than 80 were Tomahawk cruise missiles, according to two American defence officials, who asked not to be identified discussing details that haven’t been widely released.

In 2017, the United States fired 59 Tomahawks at Syrian targets against the regime there in retaliation for President Bashar al-Assad’s use of chemicals against civilians.

The Tomahawks aimed at Yemen were fired from the cruiser USS Philippine Sea, destroyers USS Mason and USS Gravely and submarine USS Florida, said an official. The latest version of the Tomahawk, which both the US and UK navies have, can loiter over an area for hours, beam target images and battle damage assessments to commanders and be programmed to attack new stationary targets while overhead.

Shortly before the allied attack, the Houthis had launched a concentrated barrage of missiles and drones at ships in the Red Sea. Asked Friday if the group could conduct more such operations after the airstrikes, Lieutenant General Doug Sims said the allies had “degraded capability.” – Bloomberg

How Iran-backed groups are widening mid-east conflict

The strikes embroil the United States in yet another fight with an Iranian proxy since the Israel-Hamas war erupted on Oct 7. American forces have launched attacks in Syria and Iraq in recent weeks against Iranian-supported militias that have targeted American bases – so far without major casualties.

The strikes started about 2:30a.m. Yemen time, with residents in Sanaa and Red Sea port city of Hodeida reporting huge explosions. Other Houthi-held towns were hit including Saada, Taiz and Hajjah, the group said.

The Houthis said there were 73 strikes in total and that five fighters were killed. It’s unclear if there were civilian casualties. The US military said 16 sites were hit including airports, radar installations and storage and launch sites for drones and missiles.

The Netherlands, Australia, Canada and Bahrain provided support as part of the mission, though they didn’t fire missiles.

Many companies have rerouted their ships away from the Red Sea – which links to the Mediterranean via the Suez Canal – forcing their vessels on much longer routes around southern Africa. Volvo Car AB said Friday it will suspend production at its Belgian plant because of supply-chain disruptions, while Tesla Inc. shares dropped after warning of the impact on its sole European factory.

Saudi Arabia said it was following the latest events with “great concern,” highlighting how some of the United States’ regional allies are uneasy about the strikes.

The kingdom borders Yemen and has been trying to forge a peace deal with the Houthis after failing to dislodge them from power for most of the past decade. The Houthis have attacked Saudi territory in the past, including in 2019 when they claimed a hit that briefly knocked out half the kingdom’s oil production.

The fighting in Gaza, at the same time, continues to rage and Israeli officials say it could go on for months, if not longer. More than 23,000 people have been killed there, according to health officials in the Hamas-run Palestinian territory.

About 1,200 people were killed during a Hamas-led incursion in October 2023 into Israel. – Bloomberg