


2024 was only a few hours old when Iran dispatched a warship, the frigate Alborz, to the Red Sea. Its arrival was yet more bad news for shipping, already facing a crisis from the Iran-backed Houthi attacks on merchant vessels. The year’s first days have seen a slew of new Houthi attacks. Executives are having to decide whether to risk going through the Red Sea and the crucial Suez Canal or to take longer and more expensive routes—without knowing what Iran is planning and how the United States and its maritime allies will respond.
The Alborz’s arrival was a response to activities by Operation Prosperity Guardian, the U.S.-led effort to crack down on Houthi piracy. On New Year’s Eve, U.S. Navy helicopters serving onboard the aircraft carrier Dwight D. Eisenhower received a distress call from the Maersk Hangzhou, a Singapore-flagged container ship traversing the Red Sea. It was traveling through the inlet because its owner, the Danish shipping line Maersk, had decided that the launch of Prosperity Guardian had made it safe enough to do so.
Indeed, the U.S. Navy had already shot down Houthi missiles fired in the direction of the Maersk Hangzhou hours before. But the Houthis were persistent: They returned again, now in four small boats, fired shots at the container ship, and attempted to board and seize it. This time, the U.S. Navy responded by sinking three of the boats; 10 militiamen were killed. Maersk diverted its ships once again.
The Danish giant was not alone. Figures from Lloyd’s List Intelligence show that between Dec. 25 and 31, a daily average of 315 vessels sailed through the Red Sea. During the same period in 2022, the figure was 385 ships per day, and last November, the daily average was 386.
Within less than a day of the U.S. Navy’s sinking of the three Houthi boats, the Alborz sailed through the Gulf of Aden and parked itself in the Red Sea. The British-made Alborz is hardly the crowning glory of Iran’s navy: It turns 55 this year. In recent months, Iran has been expanding its navy; in 2022, it was reported to have added a combat patrol boat named after Qassem Suleimani, an Iranian general killed by a U.S. drone strike in 2020, that the Iranian navy said “evades detection” and can “carry out various operations in distant waters.” The navy has also added missile boats and upgraded several ships, as well as received “a variety of locally developed and produced military hardware, like the advanced radar-evading Abu Mahdi al-Muhandis cruiser and 100 fast-attack vessels,” the Tehran Times reported on Jan. 6. Concerningly, the navy says the new warship can “sail within a 2,000 nautical mile radius without being spotted by hostile radars and surveillance systems”—and its construction, in Iran, took only 15 months.
Despite the Alborz’s age, Tehran has used it in the past to escort Iranian merchant vessels suspected of transporting arms to the Houthis. The Alborz’s arrival is laden with meaning, and shipping executives are having to decide what, exactly, that meaning is. “The arrival of the Alborz is definitely a warning, and it’s an escalatory more,” said Neil Roberts, the secretary of the maritime insurance industry’s Joint War Committee. “But it’s not clear what her task is. She’s just sitting there.” Will the Alborz once again simply escort Iranian merchant vessels bringing weapons to the Houthis? Or will it intervene if the U.S. Navy or another Western force in the Red Sea responds to Houthi attacks?
“It’s unclear what the Iranians intend in the Red Sea and the Gulf of Aden,” said Simon Lockwood, a shipping executive with Willis Towers Watson, the insurance broker. “Is it to disrupt the U.S. coalition navies?” Iran’s Revolutionary Guards have long been attacking merchant vessels in the Strait of Hormuz (as chronicled by me in Foreign Policy and elsewhere), but the Strait of Hormuz is Iran’s home turf, while the Red Sea is on the other side of the Arabian Peninsula. On Jan. 5, Maersk diverted all its container ships from the Red Sea to the Cape of Good Hope route. The day after, the Houthis launched two more attacks.
It is, in fact, almost impossible to predict what the Alborz’s mission in the Red Sea is and whether it’ll be joined by more Iranian naval vessels—yet shipping executives are having to do exactly that. (Iran has also had an observation ship in the Red Sea for a long time.) “Just before countries launched Prosperity Guardian, shipowners were very close to launching mass diversions from the Red Sea,” Roberts noted. “Then you had Maersk deciding to reenter [the Red Sea], and now it has diverted again. In every shipping headquarters, executives are having conversations about whether to divert. They have to decide, ‘Will we be targeted? Will we not?’ But it’s not just a matter of the Houthis deciding to target your vessel. Anyone can be hit. These missiles are not particularly accurate.” It’s exactly the arbitrary nature of the attacks that’s spooking the shipping industry. Shipping lines and crews routinely handle severe weather because such weather can be predicted and follows a certain pattern. The Houthis’ designations of “Israeli-linked” vessels don’t.
There’s, of course, also the risk of additional Iranian fire. But there’s also the risk that Houthi missiles and other attacks will increase because with the Alborz—and possibly more Iranian vessels—in the Red Sea, it becomes too dangerous for the U.S. Navy and its Prosperity Guardian partners to respond to Houthi attacks. War risk premiums in the Red Sea have already reached headline rates of between 0.45 percent and 1 percent, far higher even than those in perilous ports such as Benghazi. In early December, headline rates for the Red Sea were still around 0.07 percent, which means that a vessel with a total value of, say, $10 million, can now pay an additional war risk premium of $100,000.
But shipping executives aren’t just in the dark about the Alborz’s mission and whether it’ll be joined by other Iranian navy vessels or keep lonely watch in the Red Sea—they’re also unsure about Prosperity Guardian’s objectives. “Is it purely defensive? Is it forward-leaning [set up to preemptively attack Houthi forces]? Is it there to create an escorting corridor?” Roberts asked. “The allies don’t seem to have consensus on a strategy yet. Once the industry has more clarity on what Prosperity Guardian will do, executives can make a clearer decision.” That decision, though, also depends on whether executives believe the mission can be effective—and what further steps Iran will take in response.
On Jan. 5, Mohammed Ali al-Houthi, the head of the Houthis’ Supreme Revolutionary Committee, upped the ante, told the BBC that every country in the Red Sea coalition will see its ships targeted. How exactly that’s defined is up to the Houthis.
Iran’s intentions may, of course, morph depending on the course of the Israel-Hamas conflict. Tehran may decide that simply having the Alborz and perhaps other vessels in the Red Sea will sufficiently frighten Western shipping lines and rattle the Prosperity Guardian coalition. But where there’s a frigate in contested waters, there’s the risk of a dangerous clash. What would the U.S. Navy do if the Alborz, joined perhaps by more Iranian naval vessels, did come to the aid of Houthi boats under U.S. fire? No wonder the shipping industry predicts that vessels will face militia boardings and attacks using drones, anti-ship missiles, and water-borne improvised explosive devices—this month alone.