Maritime expert weighs in on the economic ripple effects of Houthi attacks

Experts have warned that the ongoing attacks on shipping vessels by the Iran-backed militant group the Houthis in the Red Sea will have ramifications on the economies of several countries around the world.

The U.S. has designated the Houthis as a global terrorist organization amid rising regional tensions and consistent deployment of missiles and drones against each other since the war in Gaza broke out.

Ian Ralby, the CEO of I.R. Consilium and who has followed maritime issues, spoke with ABC News' Linsey Davis Wednesday about the situation as the U.S. and Western allies strike back against the group.

ABC NEWS LIVE: Let's start with how these attacks have really changed how container ship owners move goods in, and how has that affected prices here in the U.S.?

IAN RALBY: Yeah, absolutely. We've seen a really dramatic change in containerized cargo movements over the last few months. Since the 19th of November, We've seen an escalation by the Houthis that has led to mostly the container ships choosing to reroute around the continent of Africa, and that has made a delay in a lot of our goods. But it hasn't been as dramatic an impact as some feared initially. The problem is that the Houthis are continuing to escalate, and so the full economic impact and overall impact of this situation may yet be felt.

ABC NEWS LIVE: And it's not just finished goods that we're talking about here. Plenty of raw products coming from India and Asia must now take that more secure route. What goods have been most affected?

RALBY: Well, really the containerized goods have been the most affected. But we are now at a place where, because most of the containerized goods have moved, what's going through the Red Sea still are bulk goods like dried materials, grains, food supplies, and oil and gas and chemical supplies through tankers.

We could see every type of cargo that moves by sea affected. And if we think about it more carefully, that is literally 90% of our world trade that is affected. So, it's a huge globalized impact for all of us.

ABC NEWS LIVE: Commerce aside, if we can really even put that to the side for a moment, but the Houthis in Iran could cause an environmental catastrophe if they strike an oil tanker. How much do the African and Gulf countries depend on that water staying clean?

RALBY: It is a great question and a critical issue. The Red Sea is different than most other bodies of water, because along the coast are desalination plants that provide the drinking water for tens of millions of people along the Arabian Peninsula coast and the African Red Sea coast. And that means that there are tens of millions of people who will only have a three-day lead supply on drinking water if an oil spill starts to make those desalination plants come offline. The humanitarian crisis that would come from that, that issue is almost incalculable.

ABC NEWS LIVE: The Houthis have attacked shipping now for three months. They say it's in defense of Gaza. But what is it really that they hope to accomplish here?

RALBY: The Houthis aren't really interested in Gaza.

That's never been their main motivation. They're interested in Israel insofar as that is part of their overall strategy. The Houthis have been a movement for decades that has been militarized for most of the last two decades, and at war with the government of Yemen for the last decade, all focused on first taking over all of Yemen, second, heading towards Mecca and third heading towards Jerusalem, where they ultimately hope to have a seat for their their globalized holy empire.

They do not care about Israel and Gaza. If [the Gaza-Israel conflict] ended today, they would continue to attack shipping because they are loving the attention they are getting. They love the support that has come with it, both from Iran, their main backer as well as others. They have recruited heavily off of these, these, new attacks in this situation overall. And we've seen their numbers swell. So they are very energized by all of this, and they're really loving the attention.

ABC NEWS LIVE: Well, the U.S. and allies have been guarding ships now for months. On occasion, struck Houthi weapons stockpiles and guidance systems. Where do you see this conflict headed?

RALBY: Well, it's escalated sort of month on month. We saw the initial attack on the Galaxy Leader be sort of boarding and capture of that ship, which they hadn't turned into a tourist attraction. They then moved to their second phase, which was the aerial bombardment, both through drones and missiles of ships.

But really, at this point, the Houthis are having fewer and fewer targets to play with outside of the US Navy and other navies. Now the EU has launched its naval mission, which is arriving now, and that may help change the picture a little bit, because as an economic force, rather than a pure military force or military alliance, they may take a slightly different approach.

But the time may have come at this point for us to maybe look at whether the US Navy is better to be focusing elsewhere, and allow the EU to carry some of the water for us on this situation as Houthis continue to look for ways to gain attention. And if we take away some of that attention, they may look for it elsewhere.