Egyptian-Houthi struggle for control of the Red Sea

Egypt stands to suffer some of the greatest losses from the escalating tensions in Bab Al-Mandab and the Red Sea, amid serious concerns that disruption to shipping through the Suez Canal could result in heavy economic, security and strategic costs.

The Houthis’influence in Yemen, coupled with their intensifying attacks on Saudi territory and facilities and their control of strategic sites and islands at the entrance to the Red Sea, poses a serious threat to Egyptian influence and raises the prospect of a new Hormuz scenario for the region and the world.

Cairo is facing a new regional reality that threatens not only international shipping and Suez Canal revenues, but also its regional standing, placing a poisoned dagger at its eastern and southern flanks.

A Heavy Price

Bab Al-Mandab, whose name means “Gate of Sorrows”, could bring further troubles to Cairo after becoming a hotspot for piracy, tensions and conflict. It could deal a severe blow to the Egyptian economy and perhaps trigger social unrest at home if the Houthis succeed in turning it into a second Hormuz.

Bab Al-Mandab, the southern gateway to the Red Sea, is a key link in the shortest maritime route connecting Asia and Europe, and East and West, via the Suez Canal in north-eastern Egypt. The canal connects the Red and Mediterranean Seas and serves as a vital artery for global trade routes. The strait is also one of the main maritime passages linking the Red Sea with the Gulf of Aden and the Indian Ocean.

Around seven million barrels of oil pass through the strategic strait every day, equivalent to around 7 per cent of global production, along with around 8 per cent of liquefied natural gas shipments, between 12 and 15 per cent of global trade, and 30 per cent of container trade. Goods worth more than $1 trillion are also transported through it annually, according to Bloomberg.

The current situation points towards a “double chokehold” scenario involving both the Strait of Hormuz and Bab Al-Mandab. This would transform the crisis from one affecting oil and maritime transport into a crisis for the global economy, spreading the shock from the Gulf to Egypt, Europe and the rest of the world.

Economists who spoke to Middle East Monitor stressed that the continued rise in oil prices above $100 per barrel would severely harm Egypt’s already troubled economy, which is under heavy debt pressure exceeding $164 billion, according to data from the Central Bank of Egypt.

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Egypt’s losses would be substantial on several fronts. First, a decline in Suez Canal revenues; second, the diversion of global shipping away from its strategic waterway in favour of safer trade routes and shipping lanes; third, the burden of paying a huge bill for imported petroleum products; fourth, higher food prices, particularly for the country’s wheat imports; fifth, the potential damage to undersea cables in the Red Sea as a result of military activity, given that around 17 per cent of global internet traffic passes through Egyptian territory and territorial waters; and sixth, the possibility of becoming embroiled in the Houthi-Saudi conflict, with all the associated security and economic risks and repercussions.

Freedom of Navigation

The Egyptian-Saudi summit hosted in Cairo last week focused on Red Sea security and freedom of navigation. Egyptian President Abdel Fattah El-Sisi stressed that the security of Saudi Arabia and the Gulf states is part of Egypt’s national security, while reaffirming Cairo’s opposition to any threat to freedom of navigation in international waterways.

But Saudi Crown Prince Mohammed bin Salman, who visited his Egyptian ally after an absence of nearly two years marked by Saudi reservations over Cairo’s handling of a number of regional issues, finds himself facing a difficult equation: Hormuz to the east and Bab Al-Mandab to the west. He therefore does not want empty statements and promises from El-Sisi along the lines of “we’re only a short distance away”; rather, he hopes for a greater Egyptian role to prevent the Red Sea from becoming an open arena for regional confrontation.

Both Saudi Arabia and Egypt stand to lose from what is happening in the Red Sea, and they face many of the same risks. Those risks appear greater for Riyadh, given the United States’ refusal to intervene directly in Yemen, its continuing disagreements with its former ally there, the UAE, and Pakistan and Turkey’s reluctance to provide Riyadh with support despite signing the “Mecca Defence Agreement”.

This suggests that bin Salman wants Egypt to provide clear support for Saudi Arabia in confronting the Houthis and securing maritime traffic, in return for new Saudi investments and cash deposits to strengthen Egypt’s financial position, and perhaps the cancellation of Saudi debts in exchange for direct Egyptian military intervention.

Egypt, for its part, is not immune to the repercussions of the conflict and is in urgent need of Saudi support. However, it fears the consequences of direct military intervention in Yemen and is likely to further strengthen maritime, security and political coordination in a way that helps manage the security situation and maintain the balance of power in the Red Sea.

Unfortunately, Egypt is seeking de-escalation, while Riyadh is moving towards a global maritime alliance aimed at militarising and internationalising the Red Sea. The Houthis, meanwhile, are seeking to gain control of the strait in order to break the blockade and reposition themselves in the region, according to African affairs researcher Mohamed Abdel Aziz.

Cairo’s Options

Egypt has several options for defusing tensions with the Houthis while avoiding direct involvement in the Yemen war. These include three main options. The first is to open a direct or indirect channel of communication with the Houthi movement to discuss specific guarantees for the safety of navigation through Bab Al-Mandab.

The International Chamber of Shipping (ICS) in London had conveyed to the Egyptian authorities a proposal from the Houthis regarding the possibility of establishing direct contacts to organise maritime navigation in Bab Al-Mandab and the Red Sea. Cairo rejected the proposal, according to Al-Araby Al-Jadeed.

The second option, according to political analyst Gamal Al-Masri, is to reach Arab, regional and international understandings and arrangements that would prevent the militarisation of the Red Sea and ensure freedom of international navigation. The third is to strengthen security and maritime coordination with Saudi Arabia and the countries bordering the Red Sea in order to increase deterrence and protect shipping and trade routes, thereby avoiding a repeat of the Strait of Hormuz crisis.

Observers have proposed other options, including coordinating with Iran to put pressure on the Houthis, seeking to contain the group that controls the Yemeni capital, Sanaa, and showing political flexibility towards it in exchange for a commitment not to target shipping bound for the Suez Canal. Other options include putting forward a comprehensive political initiative in coordination with Saudi Arabia to resolve the Yemen crisis, or reaching a deal under which attacks on Saudi Arabia and international shipping would cease in exchange for an end to offensive operations against Yemen. The final option would be to launch significant military strikes to neutralise Houthi capabilities and establish security posts around the entrances and exits of the Red Sea.

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A Complex Equation

It is in the interests of Cairo, Riyadh and other regional and international capitals to keep the Bab Al-Mandab issue separate from the Iran issue and prevent freedom of navigation from becoming hostage to the success or failure of US-Iranian negotiations.

At the same time, other parties may seek to create a complex equation that brings the two sources of leverage, represented by Hormuz and Bab Al-Mandab, together in any future regional settlement. This would give them two effective means of exerting pressure in the conflict, thereby strengthening the Iranian-Houthi position and linking the course of the war in Yemen to the war against Iran.

The objectives of US intelligence chief John Ratcliffe’s visit to Egypt on Sunday therefore warrant attention. The brief, unannounced visit may have been intended to pave the way for a broader military operation or other arrangements that could reshape the region’s balance of power and strategic calculations.

The prevailing view within Egypt’s ruling circles prioritises de-escalation and the search for a political solution, while avoiding a prolonged conflict in Bab Al-Mandab and steering clear of direct confrontation with the Houthis. However, Egypt’s considerations could clash with those of Washington and Tehran, potentially steering the crisis in a more escalatory direction and leaving the global economy caught in a squeeze between Hormuz and Bab Al-Mandab.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.