US lists Houthis as terrorists, rebels hit another US-operated ship

The U.S. on Wednesday returned the Yemen-based Houthi rebels to a list of terrorist groups, as the militants claimed their second attack this week on a U.S. operated vessel in the Red Sea region, reports Reuters. 

Attacks by the Iran-allied Houthi militia on ships in the region since November have slowed trade between Asia and Europe and alarmed major powers - an escalation of the more than three-month-old war between Israel and Palestinian Hamas militants in Gaza.

The Houthis say they are acting in solidarity with Palestinians and have threatened to expand attacks to include U.S. ships in response to the American and British strikes.

In a sign it remains undeterred, the Houthi movement on Wednesday said it made a "direct hit" with missiles on the U.S. Genco Picardy bulk carrier.

The attack, which marked the second on a U.S.-linked vessel in the area this week, was confirmed by U.S. shipping operator Genco, which said its vessel was hit by a projectile while it transited the Gulf of Aden with a cargo of phosphate rock.

Genco said there were no injuries to crew and the ship suffered limited damage to its gangway and was on a course out of the area.

"The naval forces will not hesitate to target all sources of threat in the Red and Arabian sea within the legitimate right to defend Yemen and to continue supporting the oppressed Palestinian people," the group's military spokesperson Yahya Sarea said in a statement.

On Monday, Houthi forces struck the U.S.-owned and operated dry bulk ship Gibraltar Eagle with an anti-ship ballistic missile. There were no reports of injuries or significant damage.

U.S. officials said the "Specially Designated Global Terrorist" listing was aimed at cutting off funding and weapons the Houthis have used to attack or hijack ships.

A Houthi spokesman told Reuters that attacks on ships heading to Israel would continue and the designation would not affect its position.

Iranian Foreign Minister Hossein Amirabdollahian, whose country backs Hamas in its war with Israel, said an end to the war in Gaza was needed to remove the threat to shipping.

"The security of the Red Sea is tied to the developments in Gaza, and everyone will suffer if Israel's crimes in Gaza do not stop ... All the (resistance) fronts will remain active," Amirabdollahian said at the World Economic Forum in Davos.

SUPPLY CHAINS SNARLED

Maersk, opens new tab and other large shipping lines have instructed hundreds of commercial vessels to stay clear of the Red Sea, sending them on a longer route around Africa or pausing until the safety of vessels can be assured.

"It's one of the most important arteries of global trade and global supply chains and it's clogged up right now," Maersk CEO Vincent Clerc told Reuters Global Markets Forum in Davos, adding disruption would probably last at least a few months.

Banking executives are worried the crisis might create inflationary pressures.

Freight rates have more than doubled since early December, according to maritime consultancy Drewry's world container index, while insurance sources say war risk premiums for shipments through the Red Sea are also rising.

The attacks target a route that accounts for about 15% of the world's shipping traffic and acts as a vital conduit between Europe and Asia. Japanese trading house Sumitomo Corp, opens new tab said it had some cargoes in the Red Sea that were affected.

The attacks are causing major disruption to Italian ports, fuelling fears a prolonged crisis may force companies to move traffic away from the Mediterranean more permanently.

Italy wants fellow European Union members to agree next week to create an EU maritime security mission that can become operational as soon as possible, Italian Foreign Minister Antonio Tajani said.

The alternative shipping route around South Africa's Cape of Good Hope can add 10-14 days to a journey compared to a passage via the Red Sea to the Suez Canal.

Prolonged attacks by the Houthis on ships would lead to a shortage of tankers, the CEO of Saudi oil giant Aramco said.

"If it's in the short term, tankers might be available ... But if it's longer term, it might be a problem," CEO Amin Nasser said in an interview in Davos.

Earlier on Wednesday, a Malta-flagged container ship was approached by three skiffs and a drone 10 miles southwest of Yemen's Dhubab. No damage or casualties were reported, Ambrey said in an advisory note.