Brewing Crisis on Red Sea and Horn of Africa

While global markets remain focused on the Strait of Hormuz and the economic fallout from the US-Israel war on Iran, another geopolitical risk is quietly developing along a different but equally important maritime corridor — the Red Sea and the Horn of Africa.

The region has historically been a crossroads of competition, conflict, and strategic interests. Today, rising tensions between Ethiopia, its northern Tigray region, and Eritrea are reviving concerns that a fragile peace could unravel. The Horn of Africa has endured decades of instability, and any renewed confrontation could create a new security challenge at a time when the world economy is already facing multiple disruptions.

The risks extend beyond national borders. Ethiopia’s internal challenges, Eritrea’s strategic ambitions, and the continuing civil war in Sudan are creating overlapping crises that could draw in regional and external powers. What begins as a local dispute can quickly evolve into a broader geopolitical contest when it involves a region located next to one of the world’s most important shipping routes.

The Red Sea is not merely a regional waterway; it is a lifeline of global commerce. Connecting the Indian Ocean with the Mediterranean through the Suez Canal, it carries a significant portion of international trade, including critical energy shipments and container traffic. Any disruption to ports, shipping lanes, or maritime infrastructure would add further pressure to global supply chains already strained by geopolitical uncertainty.

The timing makes the situation even more concerning. The world is already watching developments around the Strait of Hormuz, another vital energy corridor. A simultaneous crisis affecting both routes could create a serious challenge for energy markets, increase freight costs, raise insurance premiums, and intensify inflationary pressures.

For policymakers and businesses, the message is clear - geopolitical risks are no longer confined to battlefields; they directly influence markets, trade flows, and economic stability. The experience of recent years has shown that supply chains can be disrupted rapidly when strategic chokepoints come under pressure.

The Red Sea crisis may not yet dominate global headlines, but ignoring early warning signals could prove costly. In an interconnected world, stability in distant regions has become a direct economic interest for every nation.

The storm clouds gathering over the Horn of Africa deserve attention before they become another global crisis.

Greek vessel hit by missile in Red Sea

A Malta-flagged, Greek-owned vessel has been hit with a missile in the Red Sea off the coast of Yemen, maritime security firm Ambrey reports It is thought to be the third incident involving the bulk carrier, believed to be named Zografia, in 24 hours.

Tuesday's incident comes as the US military announced it had seized Iranian-supplied weapons bound for the Houthis during an operation last week. Meanwhile, the US has hit more targets in Houthi-controlled areas of Yemen.

An official told CBS, the BBC's American partner, that the US conducted further strikes on Houthi positions overnight.

The US and UK launched a wave of airstrikes against dozens of Houthi targets on Januart 11 following attacks on shipping in the Red Sea.

The Houthis have vowed to retaliate and on Sunday the US said it had shot down a missile fired towards one of its warships from a Houthi area of Yemen.

Several vessels have been targeted by the movement's fighters since November in protest at Israel's war with Hamas.

The Houthis say they are targeting vessels which are Israeli-owned, flagged or operated, or are heading to Israeli ports.

The Red Sea connects the Indian Ocean to the Mediterranean via the Suez Canal but several shipping lines have announced they are now diverting round the Cape of Good Hope to reach Europe instead.

The US said on Tuesday that analysis from the weapons it seized from a ship near the Yemen coast suggested the Houthis had been using the same kind of weapons in their Red Sea attacks.

"This is the first seizure of lethal, Iranian-supplied advanced conventional weapons (ACW) to the Houthis since the beginning of Houthi attacks against merchant ships in November 2023," US Central Command said in a statement.

Oil tankers passing Turkish straits face delays

According to a Reuters report, at least 20 oil tankers queuing off Turkey to cross from Russia's Black Sea ports to the Mediterranean face further delays as operators race to adhere to new Turkish insurance rules added ahead of a G7 price cap on Russian oil.

Turkish maritime authorities issued a notice in November 2022 asking for additional guarantees from insurers that the transit through the Bosphorus would be covered starting from the beginning of December 2022.

The new rule was announced before a US$60 per barrel price cap was imposed on Russian seaborne crude. Western insurers are required to retain proof that Russian oil covered is sold at or below that price. The industry has a 90-day grace period to comply with the G7 plan.

"Extra coverage from Russian P&I seems to be the way out for tanker operators," the shipping source said, referring to protection and indemnity insurance providers.

We'll see further delays if owners (or) operators can't provide the required guarantees."

Norway's Skuld, among the top tier of P&I clubs, said such insurers cannot provide the level of detail that has been required.

"The Turkish government's requirements go well beyond the general information that is contained in a confirmation of entry letter," Skuld said in a note.

Millions of barrels of oil per day move south from Russian ports through Turkey's Bosphorus and Dardanelles straits into the Mediterranean.

The shipping agency GAC said on Tuesday that 13 vessels were waiting to transit the Bosphorus strait southbound, all of them oil tankers and 10 of them holding Kazakh crude after loading at the Russian port of Novorossiisk.

One tanker which loaded oil at the port cleared the straits over the weekend after providing proof of insurance. Coverage for the Liberia-flagged Vladimir Tikhonov tanker came from Russian insurer.

Only two vessels were scheduled for departure on Tuesday, both coming from Russia.

Tribeca shipping agency said nine oil tankers were waiting to transit the Dardanelles southbound on Tuesday.

GAC also said that average waiting times southbound at the Bosphorus on Tuesday was four days for vessels longer than 200 meters, up from one day in mid-November.

For the Dardanelles strait, average waiting times southbound were also around four days, up from 1-1/2 days in mid-November, Tribeca said.