On November 19, 2023, a helicopter operated by the Houthi-controlled Yemeni Navy hovered over the vehicle carrier Galaxy Leader, which was passing through the Red Sea south of Jeddah. Masked and armed men rappelled down to the deck, raised Yemeni and Palestinian flags and directed the ship to the nearby port of Hodeida. Galaxy Leader has remained there ever since, becoming a selfie hotspot and a backdrop for TikTok videos by Yemeni influencers. The ship’s crew, most of whom are from the Philippines or Eastern Europe, are being detained in Yemen; there’s no indication when they might be released. Israel claimed that Galaxy Leader was “British-owned and Japanese-operated”, but that’s not the whole story: the Japanese shipping company Nippon Yusen chartered it from Ray Car Carriers, which is registered in the Isle of Man but owned by Rami Ungar, an Israeli billionaire. Ungar is one of Israel’s biggest car importers and a friend of Israeli politicians, including the then-defence minister, Yoav Gallant, who has called for a genocidal siege against the “human animals” of Gaza.

In the weeks that followed, 13 of the 32 ships targeted by the Yemeni Navy suffered a direct hit from missiles or drones, though no crew members were injured. Some shipping companies began to reroute, avoiding the Red Sea, although the journey round the Cape of Good Hope is at least ten days longer. In January 2024, the Houthi leader Mohammed Ali al-Houthi suggested that vessels with no relationship to Israel announce themselves by adding a tag to their automatic identification system (AIS). According to the shipping journal Lloyd’s List, 60 ships instead responded with a warning that they had armed guards on board. But Russian and Chinese vessels, which were specifically excluded from the Houthis’ general warning, began to broadcast messages stating their nationality or claiming they had no connection with Israel.

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Maritime insurance companies have increased the war risk premium on ships travelling through the Red Sea, from $10,000 for a $100-million cargo ship in September 2023 to $1 million by mid-January 2024. The volume of cargo passing through the Suez Canal fell by 45% – the figure for container ships is much higher – with almost half of all the ships on the Asia–Europe circuit deciding to reroute. Around 10% of global trade normally passes through the Red Sea, and so this drop caused problems for manufacturers in Europe and Asia and hit Egypt particularly hard since it depends on canal fees for foreign currency.

In Israel, the port of Eilat has been the worst affected by the blockade. Vehicle imports (its main cargo) have more or less halted. Imports of petroleum from the UAE to Ashkelon and Haifa continue at some level. This oil supplies Israeli refineries at Haifa and Ashdod, and the excess is exported via the Mediterranean port of Ashkelon to European buyers. The blockade is also affecting Israel’s energy supplies: imported coal (some from Australia, which normally uses the Red Sea route) provides around 20% of the country’s energy.

The most significant effect of the Houthi action on Israel, however, has been political. A few weeks after the first attack, the Malaysian government directed its port operators to stop all ships en route to Israel or owned by the Israeli shipping company Zim from docking. Since its creation by the Jewish Agency for Palestine in 1945, Zim has functioned as an arm of the state, providing cover for and collaborating with Mossad in its overseas operations. The Houthis saw the Malaysian decision as a victory. On December 18, Biden’s Secretary of Defence, Lloyd Austin, announced Operation Prosperity Guardian, a naval exercise to protect shipping in the Red Sea. The Pentagon named nine other participants, including the UK, Australia, Canada, France, Italy and Spain; a further ten countries wished to remain anonymous. After the announcement, Spain, Italy and France said that their naval vessels would continue to operate in the Red Sea, but their forces would not be under US command. The number of named participants now stands at ten (not including Spain, Italy and France). This was more a show of propaganda than military might. The joint contribution of Norway and the Netherlands to the operation was a dozen officers billeted to the headquarters in Bahrain of the Combined Maritime Forces, a multilateral grouping of NATO and EU countries. Most of the ships assigned to the operation were already guarding shipments through the western Indian Ocean.

The Biden administration continued the project of “normalisation” begun under Trump, focusing on diplomatic efforts to forge agreements between the Gulf States and Israel rather than on resolving the Palestinian question. A Biden State Department official told the Huffington Post that Brett McGurk, the White House co-ordinator for the Middle East and North Africa, “consistently pushed for engagement with the Saudis’ while bypassing the Palestinians. McGurk’s theory of the region, a former official said, is “very old-school, colonialist … we need to extract … what we need while minimising the cost to ourselves and others we see as like us, in this case Israelis.”

In a speech to the Atlantic Council in February 2023, McGurk outlined his plans for the new economic and military partnership comprised of India, Israel, the UAE and the US, known as I2U2. Two commercial partners keen to be involved are India’s Adani and the UAE’s Dubai Ports World. Adani, which controls ports, coal, mining, telecommunications and cement industries in India, is a crucial supporter and beneficiary of Narendra Modi’s BJP. Gautam Adani’s relationship with Modi dates back to the anti-Muslim pogroms of 2002, when Adani used his influence in Gujarat to rescue Modi’s reputation and political ambitions. He has been well rewarded: Adani has acquired major ports and airports as well as government funding to build national infrastructure for profit. Investigations into its corporate malfeasance have been sidelined. Just as the US-based Hindenburg Research issued a report accusing the Adani Group of a “brazen stock manipulation and accounting fraud scheme”, the Israeli press celebrated its purchase of the port of Haifa for $1.2 billion.

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DP World is one of the world’s largest port management and logistics firms. Its murky ownership structure is thought to include the ruling family of the emirate of Dubai. It was kicked out of Aden and Djibouti a decade ago amid charges of corruption and mismanagement of the ports under its control, but still oversees container terminals in Karachi, Cochin, Berbera, Jeddah and Ain Sokhna, and operates logistics networks and free zones throughout West Asia and East Africa.

In December 2023, Bloomberg reported plans for a land bridge between Dubai and Haifa. Cargo arriving from Asia will be loaded onto trucks in Dubai before traversing the UAE, Saudi Arabia, Jordan and Israel to arrive in Haifa. The Israeli company at the centre of these plans is Trucknet, a digital platform that connects buyers, sellers and truck drivers. Its founder, Hanan Fridman, used to work for the Israeli Defence Ministry, organising food supply logistics. The land bridge might serve the broader goal of alleviating Israel’s political isolation, but as one shipping company spokesman pointed out to Bloomberg, it’s “a niche solution for shipments specifically to Israel” and could never match the volumes of cargo transported by ship.

Excerpted with permission from Extractive Capitalism: How Commodities and Cronyism Drive the Global Economy, Laleh Khalili, Profile Books/Hachette Publishers.