US attacks Houthi anti-ship missiles, vessel hit in Red Sea

FILE PHOTO: Container ships sail across the Gulf of Suez towards the Red Sea before entering the Suez Canal, in El Ain El Sokhna in Suez, east of Cairo, Egypt, March 17, 2018. Picture taken March 17, 2018. REUTERS/Amr Abdallah Dalsh/File Photo

WASHINGTON/DAVOS — The US military carried out new strikes in Yemen on Tuesday against anti-ship ballistic missiles in a Houthi-controlled part of the country as a missile struck a Greek-owned vessel in the Red Sea.

Disruptions to Red Sea shipping caused by Houthi attacks will push up prices of consumer goods in Europe in particular, an executive from port and freight operator DP World said as the impact on commerce increased.

The Iran-allied Houthi militia has threatened to expand its attacks to include U.S. ships in response to American and British strikes on its sites in Yemen.

Attacks by the Houthis on ships in the region since November have affected companies and alarmed major powers – an escalation of Israel’s more than three-month-old war with Palestinian Hamas militants in Gaza. The Houthis say they are acting in solidarity with Palestinians.

The White House said additional US strikes on Tuesday took out ballistic missiles Houthis were ready to launch, confirming a Reuters story earlier, citing US officials, that a new strike was launched at four anti-ship missiles. The strike had not been previously reported.

“We’re not looking to expand this. The Houthis have a choice to make and they still have time to make the right choice, which is to stop these reckless attacks,” White House spokesperson John Kirby said.

READ: Yemen’s Houthis threaten to hit US ships as more tankers steer clear

France chose not to take part in the US-led strikes because it wants to avoid a regional escalation, President Emmanuel Macron told a news conference. The country has a “defensive” approach in the Red Sea and would stick to this stance, Macron said.

Two heads of international banking groups attending the World Economic Forum (WEF) in Davos said privately that they were worried the crisis might cause inflationary pressures that could ultimately delay or reverse interest rate cuts and jeopardize hopes for a US economic soft landing.

DP World CFO Yuvraj Narayan said he expected disruptions to hit European imports.

“The cost of goods into Europe from Asia will be significantly higher,” Narayan told Reuters at the annual WEF meeting in Davos, the Swiss ski resort.

“European consumers will feel the pain … It will hit developed economies more than it will hit developing economies,” the Dubai-based logistics company’s finance chief added.

READ: How are Houthi attacks on ships in the Red Sea affecting global trade?

War risk insurance premiums for shipments through the Red Sea are rising, insurance sources said on Tuesday.

In Spain, four factories owned by French tyre maker Michelin are planning to halt output again this weekend, a further sign of the impact of delays in the delivery of raw materials.

Ship hit in Red Sea

A missile struck a Malta-flagged, Greek-owned bulk carrier while northbound in the Red Sea 76 nautical miles northwest of the Yemeni port of Saleef, a security firm and two Greek shipping ministry sources said.

Yemen’s Houthis carried out the attack on the ship, the Zografia, using naval missiles, resulting in a “direct hit”, the group’s military spokesperson Yahya Sarea said.

The Zografia was sailing from Vietnam to Israel with 24 crew on board and was empty of cargo when attacked, one of the Greek sources said. “There were no injuries, only material damage,” the source added. It was still sailing but would probably be rerouted for safety checks.

Underlining concerns, Japanese shipping operator Nippon Yusen, also known as NYK Line, instructed its vessels navigating near the Red Sea to wait in safe waters and is considering route changes, a company spokesperson said.

Shipping giant Maersk, however, sent two container ships through the Red Sea carrying goods for the US military and government.