Tag Archives: Houthis

Britain, Economic, Government, Iran, Politics, Russia, Saudi Arabia, Society, United States

A winter of global discontent beckons

GLOBAL ECONOMY

Intro: As energy and food prices soar, we face a winter of global discontent facilitated by the West being run by failures of truly historic proportions

Houthi rebel forces have swept down the western coast of Yemen, seizing the strategic Red Sea port of Mokha (long renowned for its global coffee trade) then Dhubab, another port, before taking Perim Island at the mouth of the narrow Bab al-Mandab Strait that connects the southern end of the Red Sea to the Indian Ocean.

Many will say these are far off places of which we know nothing and care even less.

Perhaps. But what has just happened there is about to hit us even harder at the petrol and diesel pumps, the supermarket checkout counter, in monthly mortgage payments, bank loans, and household food and energy bills. Bab al-Mandab is Arabic for “The Gate of Grief” – and grief is what the global economy is in for this winter.

Oil and gas prices have already soared since Donald Trump’s war on Iran resulting in Tehran seizing control of the Strait of Hormuz, a development the President managed somehow not to foresee.

Since then the US Navy has been deployed to wrestle back control, with mixed results.

Before Trump attacked Iran, around 25 per cent of global seaborne oil trade passed through the Strait of Hormuz and 20 per cent of global liquified natural gas (LNG). Oil flows are now less than half of that (perhaps no more than a third) and almost no LNG at all is getting out.

It’s hardly surprising, then, that oil and gas prices have soared. But nothing like the trebling and quadrupling of prices in previous energy crunches: that’s because several workarounds were instigated, none more important than the East-West pipeline from Saudi Arabia’s oil field heartlands to the oil port of Yanbu on the Red Sea.

The Saudis built this 750-mile pipeline in the 1980s, as the Iran-Iraq war was raging, precisely as a contingency for the Strait of Hormuz being shut. This year it became the most important piece of energy infrastructure in the world, its daily capacity of 7 million barrels doing its bit to mitigate the rise in oil prices.

No longer. Which brings us back to the Houthis.

Just as the Islamic Revolutionary Guard Corps (IRGC) threatened all vessels trying to transit the Strait of Hormuz, so the Houthis, Shia insurgents funded and armed by the IRGC, now threaten all shipping attempting to pass through the southern exit of the Red Sea.

The two most crucial maritime chokepoints in the world are now under the thumb of a hardline Iranian regime and a proxy doing its bidding. It would be hard to think of a more disastrous outcome from Trump’s war on Iran. But there’s worse.

As the Houthis pushed south to take control of Bab al-Mandab, the Saudi East-West pipeline came under attack from drones dispatched by Iraqi Shia militia, yet more Iranian proxies.

Even the dim-witted can surely see a pattern here.

The drones took out pumping stations, forcing the Saudis to close the pipeline for at least six weeks for repairs. This has crippled Saudi oil exports in the process, a harbinger of the global spike in oil prices to come.

This week the benchmark Brent crude oil price hit almost $110, the highest since May, before falling back a bit. Aramco, the Saudi national oil giant, told European refineries there would be no deliveries next month. The prices of what’s refined from crude oil – jet fuel, petrol, diesel – are rising fast.

Tehran has, in effect, opened a second front in its war with America, with huge consequences for the global economy – and Trump, still struggling to escape from the first front (which he started), has no idea what to do about it.

The Saudi crown prince, Mohammed bin Salman, has pleaded with the US President for military help to repel the Houthis. Washington will likely be reluctant to assist, mindful that the Houthis survived a massive US bombing campaign, lasting over 50 days and involving 1,000 airstrikes, in the spring of 2025.

The Saudis are certainly in no position to dislodge the Houthis on their own. The group already controls a big chunk of northern Yemen, including the capital, Sanaa, despite previous Saudi military interventions on behalf of the beleaguered Yemeni government.

Now that the Houthis have their foot on the Saudi oil-export windpipe, they are going nowhere fast.

TWO

Sometimes it really doesn’t rain but it pours. The coming global energy crunch will be compounded by the fact that Ukrainian drones have taken out a third of Russian diesel-refining capacity. Russia is now having to import diesel from India, pushing up global prices even further.

Russia is retaliating by sending its drones to hit Ukrainian grain infrastructure and exports going through the Black Sea, seriously hindering the amount of grain getting out from one of the world’s great bread baskets.

It’s a prelude to the soaring food prices to come. Farm machinery is powered by diesel. So that cost is rising. So is the cost of fertiliser. Around 20 per cent of global supply used to come through the Strait of Hormuz. Not now. The upward pressure on food prices will become relentless.

Suddenly we’re looking at the prospect of soaring energy and food prices, as oil and grain markets buckle. A new broad-based inflationary surge is coming down the pike.

The Bloomberg commodity index has already risen by 48 per cent this year. That’s now working its way into consumer prices.

UK inflation is back over 3 per cent – with more rises to come. European gas reserves are at historic lows, with time running out to replenish them for winter. So, gas is about to become much more expensive, too.

OFGEM’s energy price cap is forecast to rise by as much as 25 per cent in January.

We are now moving into a world of higher interest rates. The European Central Bank increased its benchmark rate last week; the US Federal Reserve did the same just days ago. The Bank of England kept its rate on hold. But it’s only a matter of time before it starts raising rates too. Now that inflation is back, it will have no other choice.

We are looking at higher interest rates for as far as the eye can see. The chance of reviving the housing market is non-existent. While all this unfolds, politicians on both sides of the Atlantic debate and promise irrelevancies while ignoring what really matters.

Britain has been consumed by rows over political donations which in the grand scheme of things barely matter a jot, but allow politicians to posture at their hypocritical worst.

America has a President – who’s caused much of the global economy’s turmoil – trying to bribe voters with a $5,000-a-head “dividend”. France has a lame-duck President who talks a lot and does nothing as his country sinks into a fiscal morass.

German Chancellor Friedrich Merz might not survive next week following a series of bad results in elections.

The markets, of course, know exactly what’s happening. Inflation is coming back with a vengeance, the war on Iran is being lost, and the global economy is at the mercy of Islamists bent on our destruction.

It should come as no surprise the bond vigilantes demand ever higher interest rates. A risky world means ever-rising risk premiums.

We face a winter of global discontent with a political leadership missing in action, obsessed with an agenda that means little and is of a self-serving discourse, wholly inadequate to the challenges about to confront us. When the IRGC and the Houthis hold the upper hand, nobody can be in any doubt we’re being run by failures of historic proportions.

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Britain, Government, Iran, Israel, Middle East, Politics, United States

Iran vows revenge on Israel

MIDDLE EAST

Intro: The temperature in the Middle East is rising by the day. Israeli air strikes in Lebanon and in Tehran claimed the lives of a senior military commander from Hezbollah and that of the political leader of Hamas. Ayatollah Ali Khamenei, Iran’s supreme leader has vowed to inflict “severe punishment” on Israel. An all-out regional war looks ever likely, but the power vacuum in Washington DC is hardly helping matters

THE escalation has started. Today, the world stands on the brink of major war. Israel has retaliated following rocket attacks launched from Lebanon that killed twelve children in the Golan Heights. First, an Israeli rocket attack killed a senior military commander from Hezbollah, Fuad Shukr, in Beirut. Then, Israel assassinated Ismail Haniyeh, the political head of Hamas, in a precision air strike on a Tehran apartment building.

These two surgical killings mark a major upsurge of Israel’s twin conflicts with its neighbours – Lebanon to the north, and the Palestinians to the south. They effectively end any chance of a negotiated ceasefire in Gaza.

Now Iran, which backs both armed groups, is seeking retribution and revenge. Ayatollah Khamenei, Iran’s supreme leader, will regard Israel’s elimination of Haniyeh – on Iranian soil – as a deep humiliation that can be salved only with a confrontation that is bound to claim yet more Israeli lives.

Khamenei, who had met the Hamas leader only a few hours earlier, described Haniyeh as “a dear guest in our home” before adding: “We consider his revenge as our duty.”

The political leader of Hamas had flown to Tehran for the inauguration of Iran’s new president. In a region of the Middle East where “face” and reputation are valued so highly, the Iranian state knows it has little choice but to respond in kind.

The grim likelihood of war spreading across the Middle East and beyond has also increased thanks to the United States’ apparent lack of interest.

The White House seems disinclined to enforce the “pax Americana” that has protected the West and its interests for decades. As President Joe Biden prepares to leave office, it is widely viewed that Mr Biden has become a lame duck who will doze through the final months of his presidency.

The second air strike – presumably masterminded by Israel’s intelligence service Mossad from Jerusalem – took place at 2am in Tehran.

But it was still the middle of the evening in Washington DC and there should have been plenty of time for the White House to react.

The fact that neither President Biden nor Vice President Kamala Harris deigned to speak suggests that Washington is either asleep, on summer holiday, on autopilot, or unwilling to act in an election year, all of which are equally dangerous.  

What next? After the nine-month siege of Gaza, some will say that Hamas can no longer be capable of inflicting much more pain on Israel.

But, based in Lebanon to Israel’s north, Hezbollah was able to fight Israel to a stalemate as recently as 2006.

The group still has a large arsenal of Iranian supplied rockets and drones.

It appears likely that Iran, too, could launch cruise and ballistic missiles as well as kamikaze drones at Israel in a repeat of April’s Operation True Promise (a coordinated attack of more than 300 missiles: itself a retaliation for Israel’s bombing of the Iranian embassy in Damascus).

It is Iran’s proxy forces throughout the rest of the Middle East that make international conflict so terrifyingly plausible.

The Houthi rebels in Yemen are stretching the West’s military resources in the Red Sea by launching drone attacks on commercial shipping and directly attacking vessels from the U.S. and Royal Navies.

The Houthis have also sworn to launch air strikes against Israel itself, a response to Jerusalem’s attacks on Houthi-held territory in Yemen.

Then there are Iran’s Shi’ite allies in Iraq and Syria, who have recent history of attacking the few remaining American air bases in the region.

For Israeli Prime Minister Benyamin Netanyahu, perhaps he has concluded that Israel can cope with any escalation of the conflicts now threatening to engulf his nation.

In attempting to decapitate Hamas and Hezbollah, Israel is repeating the tactic that saw America successfully neutralise al-Qaeda as a global threat – by hunting down and destroying its leaders.

But Israel, of all countries, should know that wars of attrition are not won by assassinations alone.

Israel killed Hamas’s founder, Sheikh Yassin, as long ago as 2004, yet the Hamas threat grew ever stronger.

The danger for Netanyahu and Israel is that the country could be dragged into a bigger, wider conflagration on many fronts. And if that happens, the ramifications become very hard to predict.

In terms of military resources, Israel – with American backing – seems well placed to survive that conflict.

While U.S. Defence Secretary, Lloyd Austin, has previously said America wants to cool the temperature in the Middle East, Washington has been resolute in its insistence that the U.S. military would come to Israel’s aid if it was attacked by Iran – as it did when Tehran launched its huge drone and missile strike in April.

However, it remains to be seen how many civilian deaths, and how much economic damage, the Israel public is prepared to endure before ousting Netanyahu and suing for peace.

A widening conflict would leave Britain in an invidious position.

Former prime minister Rishi Sunak ordered British jets based in Cyprus to shoot down Iranian drones heading for Israel in a show of support for America and Israel. Sir Keir Starmer is likely to do the same.

Yet would Britain put boots on the ground if America and Israel called for military help? Surely that would make Britain, and British interests overseas, a target for Iran’s allies?

Where would our involvement leave British relations with our European neighbours – some of whom have been vociferous in their support for Palestinian civilians caught up in the Gaza conflict?

And how would it affect our relationship with NATO ally Turkey, which has been increasingly strident in its support for Hamas, with President Recep Tayyip Erdogan even threatening to send troops to Palestine to support Hamas.

Russia’s involvement in the conflict should be considered, too.

Moscow is a long-term ally of Iran, which has provided drones and missiles for its war in Ukraine and it has a major military presence in Syria, providing Russia’s only military base on the Mediterranean.

The Kremlin also remains a master of destabilising tactics, using social media outlets to spread rumours and deploying “useful idiots” in rival states to foment social unrest and division.

The temperature in the Middle East is rising by the day. The usual mechanisms for de-escalation and negotiation seem dangerously absent.

How, or where, will it end?

The power vacuum in Washington isn’t helping matters.

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Britain, Foreign Affairs, Middle East, Saudi Arabia, Syria, United States, Yemen

Saudi Arabia, Yemen and the West…

YEMEN

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Map depicting Houthi controlled Yemen and the struggle for control

Intro: Saudi Arabia should limit its war in Yemen. Despite the difficulties of late the West should be in a position to help, not by rescinding an almost century-old alliance.

The recent air strike earlier this month that hit a funeral in Sana’a did far more than kill some 140 civilians and wounding 500. For once, it drew rare attention to Saudi Arabia’s 20-month war in Yemen and the strained relationship which now exists with America. That alliance is now under threat with the U.S. reconsidering its military support for the campaign.

Critics are adamant that it is time for the West to abandon its embarrassing alliance with the Saudis. They ask, how can the West denounce the bloodshed and carnage in Syria when its own ally is indiscriminately bombing civilians in Yemen? If the Saudis, with Western support, can intervene to defend the government of Yemen, why shouldn’t Vladimir Putin of Russia not defend the regime of Bashar al-Assad in Syria?

Morally, and perhaps also legally, the U.S. and Britain are directly implicated in Saudi actions: they sell warplanes and provide munitions and armaments to the Saudi regime; they assist with air-to-air refuelling and help with targeting. Critics also point to the fact that Saudi Arabia is a woeful ally against jihadism. They insist that the Saudis are inflaming global extremism through its export of intolerant Wahhabi doctrines.

Such arguments do have strength. On balance, though, the West should not forsake the Saudis. Rather, it should seek to restrain the damage of their ongoing air campaign, and ultimately aim to bring it to an end. Western support cannot be deemed to be unconditional.

Consider first the moral position and balance. The two conflicts are both ghastly, but not equally so. Around 10,000 have died in Yemen, too many, but far fewer than the 400,000 or so that have perished in Syria. The Saudi-led coalition has not used chemical gas – although it has undoubtedly been careless. It has bombed several hospitals, and its blockade of Yemen and the subsequent damage to its infrastructure has caused dire hardship. A famine now looms, with more than half the country deemed to be hungry or malnourished.

The political context is also different. The Assad regime wrest power in a coup, and has held onto it through tyrannical brutality. Its deliberate crushing of peaceful protests and dissent in 2011, and its indiscriminate and repeated slaughter since then, has removed any speck of legitimacy it may have had. By contrast, Yemen’s president, Abd-Rabbo Mansour Hadi, though ineffectual and flawed, has at least presided over a broad coalition that was established through UN-backed negotiations (which followed the resignation of the former strongman, Ali Abdullah Saleh). The Shia Houthis and Mr Saleh, backed by Iran, overturned that deal by force. They frequently fire missiles indiscriminately at Saudi cities, although the damage is often limited.

While the West has little reason to join the war, it has much at stake if it goes wrong. Al-Qaeda’s local franchise has been strengthened, and the Houthis have begun firing missiles at ships in the Bab al-Mandab strait, one of the world’s vital sea lanes. America launched cruise-missile strikes against Houthi-controlled radar sites after attempts were made to attack one of its warships patrolling the region.

The West’s involvement with the Al Sauds is important to understand. Its long alliance, which dates back nearly a century, was also built on its extensive commercial interests that the West has had in the Gulf. Over the decades, the Saudis have put up with many American blunders in the Middle East, such as the invasion of Iraq in 2003. They were shocked, too, by how the West abandoned the former Egyptian dictator, Hosni Mubarak, during the mass protests and upheaval of 2011. Last year’s deal between America and Iran to restrict Tehran’s nuclear programme, and Mr Obama’s skewered rhetoric and offhand tone about the Saudis, has deepened their own fear of abandonment. And, the Congressional approval for a bill to allow the families of victims of the 9/11 attacks of 2001 to sue Saudi Arabia, overriding Mr Obama’s presidential veto, is further evidence that the disenchantment is mutual.

Yet, despite this, there are still good reasons for the West to maintain ties to Saudi Arabia. The alternative to the Al Sauds is not liberalism but some form of radical Islamism. Saudi Arabia remains the world’s biggest oil exporter, and holds guardianship of Islam’s two holiest shrines. Better surely that these be in the hands of a friendly power than a hostile one. Whilst slow to respond to the emerging threats of fundamental Islam, it is now a vital partner in the fight against jihadism. It will be better placed than the West to challenge their nihilistic and radical ideologies. The chaos of the Middle East, a tinderbox of tension and hatreds, stems at least in part from Sunni Arabs’ sense of dispossession. The best hope of containing the volatility is to work and collaborate with Sunni powers like Saudi Arabia.

As uncomfortable as it is, the West should stay close to the Saudis. Riyadh should be encouraged to reform economically and politically, while acknowledging widespread concern in the Gulf about the spread of Iranian influence. As the U.S. has said, Western support cannot be ‘a blank cheque’; the more the West helps Saudi Arabia wage war in Yemen, the more it becomes exposed and liable for war crimes. If the Saudis want to fight with Western weapons, they must be obliged to respect the laws of war.

But above all, the West should use its influence and diplomatic powers to help the Saudis end the bloody stalemate. It should promote a reasonable power-sharing agreement that directly involves the Houthis. That would make Yemen a model by which the future of Syria could also follow suit.

 

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