Red Sea geopolitics: Rising conflict, more competition

The Red Sea, a key conduit for world trade since 1869 when the Suez Canal started operating, is also of increasing interest to regional and global powers, with its growing role as a critical link in China’s Belt & Road Initiative (BRI) at the heart of geopolitical competition in the Eastern Hemisphere over the past decade.

As such, from Djibouti through the Red Sea to the Mediterranean, there is an expansion of BRI infrastructure investment alongside a Chinese military presence, with other powers also more active.

A prime example of military build-up in the Red Sea is Egypt’s recent major expansion of its Berenice naval base, inaugurated in 2021. Further south, ports in Sudan have also developed in the context of the region’s geopolitics, notably China’s rehabilitation and enlargement of Port Sudan’s container terminal, now part of BRI.

"The Red Sea remains a flashpoint for geopolitical competition, peaceful or otherwise"

Also active in the city is the United Arab Emirates (UAE), which seeks a role in the central part of the Red Sea through involvement in Port Sudan logistics. Alongside Emirati control of Yemeni islands at Bab al-Mandeb to the south, and a 49% stake in the Suez Gulf and Canal infrastructure project in the north, this strengthens the UAE's position regarding shipping around the Red Sea.

Sudan also signed a 99-year agreement with Turkey in 2018 to rehabilitate the Red Sea port of Suakin and build a marine basin to support civilian and military vessels, giving Ankara a regional foothold.

Further south, Eritrean ports are also drawing regional and global interest. The UAE has a base in Eritrea that supports anti-Houthi military activities in Yemen. Also, Moscow, not a player in the area since its forces left Egypt in the 1970s, announced in 2018 that it is setting up an Eritrean logistical centre.

Russia also showed interest in Port Sudan by proposing a 25-year agreement with Khartoum in 2020 to build a facility for Russian warships. However, the UAE and the US pressed Khartoum to step back on Moscow’s access to Port Sudan, and in 2021 Sudan suspended the pact.

Struggles are therefore rising over footholds at strategic locations around the Red Sea, with the US also building up its naval fleet there.

The Gaza war's impact on Red Sea security

Clashes involving military and commercial vessels in the Red Sea have increased since the war in Gaza started in October. This has involved Houthi rebels in Yemen attacking merchant ships and naval vessels. There have also been drone and missile attacks on Israel. The conflict in Gaza has spilt over into the Red Sea, involving Iran through its Houthi allies, with the US setting up a maritime task force in the region as a result.

The Sudan war and attacks against southern Israel threaten Saudi Arabia’s strategic goals along its western coast. Driven by its ambition to diversify its economy, the kingdom has strengthened security relations in the area, upgrading the Saudi fleet in the Red Sea, and supporting multilateral initiatives, including with US-led naval forces.

Stability in the Red Sea region is crucial to many Saudi development plans. For the traditional oil economy, the Yanbu pipeline terminal on the Red Sea is also critical for the Saudis as an alternative to exporting oil through the Hormuz Strait.

"Israel's war in Gaza has spilt over into the Red Sea, involving Iran through its Houthi allies with the US setting up a maritime task force in the region as a result"

Against this backdrop, Israel’s war in Gaza and the fighting in Sudan pose challenges for Riyadh. After 7 October, Houthi militias hit Israel and targeted shipping in the southern Red Sea. Houthi attacks may also eventually endanger the Tiran and Sanafir islands, at the mouth of the Gulf of Aqaba, a trade gateway for Jordan and Israel. War in Sudan also threatens Saudi security in the Red Sea, and Riyadh has been engaged in mediation.

On a strategic level, the India-Middle East-Europe Economic Corridor (IMEC) unveiled in September as a counter to BRI, bypasses the Red Sea altogether. IMEC, composed of an eastern flank connecting India to the Arabian peninsula and a northern one from there linking to Europe, is a major geopolitical initiative drawing regional states away from BRI, despite Saudi Arabia and the UAE being signatories to the Chinese initiative.

IMEC would cut the time of transporting goods from India to Europe by 40% and could also help position Saudi Arabia as a global logistics hub. For the UAE, the IMEC fleshes out the Comprehensive Economic Partnership Agreement with India.

Nevertheless, IMEC faces challenges when viewed against the backdrop of the disappointing results of previous Western infrastructure programs: such as the US-championed Build Back Better World scheme. The financing is likely to be thorny for IMEC, which could cost $20 billion and (unlike BRI) relies primarily on attracting private capital that might not be forthcoming.

Furthermore, the transport of goods through the northern IMEC route connecting West Asia to major ports in southern and western Europe, bridged by a railroad linking the UAE and Saudi Arabia to Jordan and Israel, depends on normalisation between Saudis and Israelis.

However, this process has been stalled due to Israel’s current war in Gaza, with anger in the Arab world preventing Saudi Arabia and the UAE from entering into such a project. “Saudi-Israeli normalization remains the missing piece in the kingdom’s geostrategic mosaic,” according to Eleonora Ardemagni, senior associate research fellow at the Italian Institute for International Political Studies, writing in late November for the Sada Journal of the Carnegie Endowment for International Peace.

Though the conflict has not reversed the trend toward the further consolidation of US-India, India-Israel, or India-Gulf relations, Israel’s war in Gaza challenges the IMEC geopolitically. Without the war ending, regional connectivity is doubtful, including developing the northern IMEC route through Jordan. There could even be an option for Palestinians in the occupied West Bank and Gaza to enter the project, rather than be excluded.

Despite challenges, the logic of linking European, West Asian, and Indian markets holds; and India’s appetite for the project is strong. Thus, stakeholders in IMEC are “unlikely to abandon it,” John Calabrese of the Middle East Institute wrote this month.

Meanwhile, however, the region, including the Red Sea, remains a flashpoint for geopolitical competition, peaceful or otherwise.

Riad al Khouri is a political economist and special advisor to the Global Challenges Forum in Geneva