American website: Trump administration plans to take a tough stance against Iran and the Houthis

The American website Oil Price wondered about the ability of Trump's second term to bring lasting peace to the Red Sea, noting that Trump's election coincided with a decrease in Houthi attacks in the Red Sea and an increase in oil flow.

The Trump administration is planning to take a tough stance against Iran and the Houthis, which could either stabilise the region or lead to renewed conflict, a report by the website, translated by Yemen Youth Net, said. Experts are puzzled about whether the current calm in the Red Sea will continue after Trump takes office.

Yemen’s Houthi rebels have been wreaking havoc in the southern Red Sea and Gulf of Aden for more than a year, targeting container ships, tankers and military vessels linked to the West. The resulting supply chain disruption has had a major impact on global trade, causing container rates to spike and shipping to divert around the Cape of Good Hope.

However, early indications suggest that President-elect Trump's strongman image could help calm tensions and ease bottlenecks across this critical maritime chokepoint.

The report said the incoming Trump administration urgently needs a new strategy to defuse tensions in the critical Bab al-Mandab Strait, which has caught the Biden-Harris team completely off guard. The administration’s policies toward Yemen have been marked by inconsistency, leading to dozens of commercial ships being struck by drones and suicide missiles, with several ships sinking as a result of the chaos.

A second Trump administration needs a strategy to address the deeper foundation of American interests in the Middle East, he added. That likely means continuing his hardline policies against the Houthis.

A recent report by the Wall Street Journal quoted officials in Trump's transition team as saying that they intend to impose existing sanctions and impose new ones on the group, including redesignating the Iranian-backed Houthis in Yemen as a foreign terrorist organization and preventing countries from buying Iranian oil.

The mere prospect of Trump returning to the White House next month appears to have already eased tensions in the vital waterway, according to the report. New data from Goldman Sachs, citing global trade intelligence firm Kpler, shows a sharp increase in oil flows by tanker in recent weeks.

“Despite the market’s renewed focus on geopolitical supply risks, actual oil flows through the Red Sea have recovered over the past two weeks amid ongoing setbacks from Iran and its proxies,” Goldman Sachs’ Ephraim Sutherland and Dan Struyven wrote in a note.

“We see a significant decline in tanker freight rates and up to $3/bbl of decline in our refined products margin forecast as a result of the potential full liquidation of oil tankers in the Red Sea and their rerouting to Russia,” the analysts said.

“The Houthis may have eased their Red Sea disruptions for now, but let’s see how long it takes for them to come up with more reasons to start again — renewed fighting in Gaza, a new ‘maximum pressure’ campaign targeting the Houthis and remaining Iranian proxies, etc,” Scott Modell, CEO of Rapidan Energy Advisors, said of the Kepler data.

“We do not rule out further targeted attacks against US and Israeli assets in the region,” he added. But the question remains: Will the de-escalation in the sensitive waterway continue after January 20?