Crisis in Yemen: avoiding Suez is rewarding pirates

Since November, hundreds of cargo ships have been forced to detour around the African continent to avoid attacks by Yemen's Houthi rebels on ships passing through the Bab al-Mandab Strait, adding 6,000km to their journey, with a increasing costs, but also adding unexpected problems .

Unfortunately, the distraction provided by attacks in the Red Sea has allowed several hitherto dormant piracy hotspots to spring back to life. For example, pirate attacks on ships sailing along the Somali coast have surged, with more than 20 hijacking attempts since November driving up the prices of insurance cover and armed security guards.

Last month, Houthi rebels attacked and set fire to a cargo ship sailing in the Gulf of Aden, Somalia. “They took this opportunity because international naval forces operating off Somalia have scaled back their operations,” Ismail Isse, a pirate financier, told Reuters , adding that he had been involved in the hijacking of another bulk vessel in December.

“If we don't stop it while it's still in its infancy, it can become like before,” Somali President Hassan Sheikh Mohamud told Reuters last month.

The international community had not considered the problem

Interventions from the international community have been conflicting and, for now, piracy is being tackled in random order and without a common strategy. Last week, the Indian Navy managed to intercept the Maltese-flagged bulk carrier MV Ruen Ruen; he captured all 35 pirates on board and rescued 17 hostages.

“This speech shows that the risk/reward ratio is definitely stacked against pirates and hopefully this will make them think a little,” said Cyrus Mody, deputy director of the anti-crime arm of the International Chamber of Commerce.

By contrast, a Bangladeshi Foreign Ministry official told Reuters the government was "not in favor of any kind of military action" to free the Abdullah, a Bangladeshi-owned bulk carrier hijacked by Somali pirates 10 days ago.
Related: Hopes for ceasefire in Gaza put pressure on oil prices

Last month, Arsenio Dominguez, secretary general of the International Maritime Organization, warned shipping companies to be on high alert regarding piracy after several ship seizures off the coast of Somalia and in the Gulf of Guinea. Dominguez urged shipping companies to observe stringent security practices that were common during the previous piracy crisis.

“They need to be more in line with what happened between 2008 and 2012 off the coast of Somalia. We are having conversations to create awareness about the Gulf of Guinea. . with the increase in traffic in the region, we should avoid a new escalation or increase in piracy incidents,” he said.

A non-secondary cost problem

The waterways off Somalia are some of the busiest shipping lanes in the world, thanks to their status as the shortest sea route between Europe and Asia. Every year, around 20,000 ships pass through the Gulf of Aden on their way to and from the Red Sea and the Suez Canal.

But the Gulf of Aden is not the only piracy hotspot in Africa that has seen a resurgence during the Red Sea crisis. L ast month, pirates operating off the coast of Equatorial Guinea kidnapped the crew of a ship. Over the past decade, the Gulf of Aden and the Gulf of Guinea have been some of the most dangerous piracy zones for oil companies and other seafarers, with a peak in piracy activity in 2018. Here is a map showing pirate activity in the world

The Gulf of Guinea is a hot area because there is a high concentration of well-armed militias, also because they finance themselves with illegal oil trafficking (i.e. theft). So these criminals are ready to seize the opportunity of increased maritime transit to increase their resources, while the navies of coastal states are not particularly robust.

The Gulf of Mexico remains another piracy blackspot, thanks to its abundant oil and gas resources, although pirates are mostly associated with local criminal groups rather than cartels. Piracy requires investments, it cannot be improvised, and therefore the groups that practice it must already have a minimum base, let's say infrastructural, both to capture ships, but also to manage ransoms or sale of cargoes. This is why it is an activity for organized and structured gangs.

Fortunately, the African threat was largely eliminated several years ago thanks to the implementation of safety measures on board, including traveling with armed guards. Several coastal states have also adopted more stringent anti-piracy action.

In addition to disruptions to shipping activity, increased piracy in African waters will likely lead to increased shipping costs, due to heavy insurance premiums. Underwriters have been charging ships sailing the Red Sea tied to US, British and Israeli companies up to 50% more in war risk premiums due to the persistent threat of attacks. War risk premiums for Red Sea voyages have reached 1% of the ship's value, translating into hundreds of thousands of dollars in additional costs for a seven-day voyage.

“The ships that have had problems so far, almost all have an element of Israeli, US or British ownership,” Marcus Baker, global head of marine and cargo at Marsh, told Business Insurance.

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The article Crisis in Yemen: avoiding Suez is rewarding pirates comes from Economic Scenarios .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/crisi-nello-yemen-evitare-suez-sta-premiando-i-pirati/ on Sun, 24 Mar 2024 09:00:28 +0000.