Post Event: Red Sea Ports Crisis and Regional Security – UAE and China Role

Post Event: Red Sea Ports Crisis and Regional Security - UAE and China Role

The New York Center for Foreign Policy Affairs (NYCFPA) successfully hosted a noteworthy conference titled “Red Sea Ports Crisis and Regional Security – UAE and China Role.” The event took place on May 10th, from 06 to 08 pm, providing much time for in-depth analysis and dialogue. The Panel of Distinguished Guest Speakers include Marcu Scagliusi, Simona Marsina and Sergio Faccini. 

Speakers embarked on a critical analysis of the contemporary issues in the Red Sea. The discussions illustrated the complexities of Regional Security and highlighted the role of the UAE and China. The event witnessed reputable participation from attendees, reflecting the widespread praise of its importance in addressing pressing global matters. Furthermore, the public reaction to the event was overwhelmingly favourable.

The Highlights speakers’ discussion during the event are provided below.

The Impacts of Recent Events on Red Sea Shipping

Red Sea is in the spotlight Since November 2023, Houthi rebels from Yemen have been launching raids on commercial shipping in the Red Sea. Initially, the attacks were a direct response to the continued Israel-Gaza conflict and primarily concentrated on Israeli-linked vessels. The pattern of targets has increased more unpredictably. Around 12% of global trade, including 30% of international container volume, passes through the Red Sea.

The waterway is still unrestricted for business, but many major shipping companies – including Maersk and several large Japanese players – have reported that they are suspending transit via the route and diverting around the Cape of Good Hope. This diversion adds over 6,000km to transits. Consequently, shipping associations such as BIMCO and INTERTANKO –  expect an increase in diversions across ship types and an affiliated rise in legal disputes stemming from the higher costs of these diversions. 

Many disputes will likely involve knock-on effects arising from third-party issues. For example, claims may be brought by consignees or receivers whose products have been postponed by the extra journey time. In the case of just-in-time manufacturing, delays to key supplies could lead to production line shutdowns and withdrawn orders, which could in turn lead to claims for large sums in lost revenue. Perishable cargo may be unsuitable for use after spending extra weeks at sea, which could lead to claims for damages.  

Whether they go through the Suez Canal or around Africa, vessels may operate additional specialised security contractors during this course to try to ensure the safety of their cargo. The Houthi rebels’ use of missiles and drones indicates that assistance from security contractors may only be of limited use, however. Shipping companies crossing the Red Sea could decide to forgo any additional protection whatsoever, decreasing the likelihood that claims of this nature will be brought. 

In the short period since the beginning of the disruption, insurance premiums have risen significantly and are anticipated to rise further. These claims may lead to a considerable volume of disputes, should insurers decline to pay out for lost or delayed cargo or damage to vessels. Claims will rely on the terms of each policy, but insurers may decline to pay out in the absence of a war perils exclusion or on grounds that owners or charterers wilfully ignored their safety by continuing to sail through the Red Sea.

UAE Response to Changing Security Threats

Driven by the situation that the US will depart the Middle East region, over the past decade the UAE and Saudi Arabia have improved investment in ports and military bases in and around the Red Sea basin. Their objective is to not only protect access to the vital waterway but also protect their commercial claims and support the growth of their economies.

In recent years, this process has somewhat evolved. Following the targeting of key energy infrastructure investments in both countries by Iranian missiles dispatched from Iraq and Yemen, Riyadh and Abu Dhabi have supported further in securing the Red Sea by shoring up military assets in littoral states. In particular, the US’s slow reaction in supporting Saudi Arabia following the attacks on Abqaiq and Khurais in September 2019 – despite a friendly president occupying the White House – unnerved the leadership.

At the same time, some external circumstances, including the collapse of the oil price in April 2020, the COVID-19 pandemic, and the resulting closure of financial cities in China, have made both states better appreciate their exposure to global economic shocks. In response, they have sought to develop their strength to destabilising events and to accelerate the pace of economic diversification, and this has become manifest in port investments in critical locations in the Red Sea basin.

UAE’s Red Sea Economic Blueprint

Driven by its national vision, the UAE has made substantial progress in furthering its commercial stakes in the Red Sea basin and the Horn of Africa over the past decade through investments by Dubai Ports (DP) World in ports, and also by developing military bases or helping militaries throughout the region.

This has occurred amid a contest between the UAE and its neighbours – Turkey, Iran and Qatar; however, now the Qatar problem is resolved and UAE and Iran have de-escalated tensions, the UAE is concentrated primarily on its economic future, and on protecting the country against changes in the world order and future financial crises in the global system.

In a bid to diversify international counterparts, and in anticipation of a reduced US presence in the Gulf region and the entry of China in its wake, Abu Dhabi’s President Mohammed bin Zayed is spearheading a long-term strategic vision which aims to follow in China’s footsteps and acquire for the UAE a string of pearls connecting the Indian Ocean and the Red Sea.

The plans concern investing heavily in Yemen and the Horn of Africa to secure access to ports and licences to construct naval bases which will not only lend the UAE strategic profundity but also a means to make the nation indispensable to developing China’s Belt and Road Initiative.

UAE ambitions in Horn of Africa?

In trying to demonstrate itself as a major economic and regional power, the United Arab Emirates has set its sights on the Horn of Africa. Over the last decade, the UAE has slowly increased its presence in the explosive region, using development and humanitarian schemes to boost its prominence. 

It has significantly financed ports, logistics and trade developments, to secure its port kingdom across the strategic Bab el-Mandeb Strait by the Red Sea, to profoundly increase its international trade and regional soft power.


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