The guided-missile destroyer USS Gravely, seen here in an undated photo, shot down two anti-ship ballistic missiles Dec 30, 2023, in the Red Sea, according to U.S. Central Command.

The guided-missile destroyer USS Gravely, seen here in an undated photo, shot down two anti-ship ballistic missiles Dec 30, 2023, in the Red Sea, according to U.S. Central Command. (U.S. Navy)

Iran’s dispatch of a warship to the Red Sea is its boldest move yet to challenge U.S. forces in the key trade route, emboldening Houthi militants whose missiles have disrupted shipping over the past two months.

Tehran is unlikely to want direct confrontation — its old frigate being no match for the U.S.-led maritime task force patrolling the waters off Yemen — but it takes the projection of Iranian power in the region to another level. That’s raising tensions after the Houthis started attacking vessels they claimed were headed to or owned by firms in Israel in a bid to end the military assault on Gaza.

Iran has rejected calls from Western powers to pressure the Houthis to end their attacks in the Red Sea. Some of the latest ships targeted by the rebels don’t have clear links to Israel, according to Kevjn Lim, a Tel Aviv-based analyst at S&P Global Market Intelligence. That includes an attack on an AP Moller-Maersk A/S container ship, after Denmark said it was joining the task force.

“They aren’t showing a willingness to deescalate, so we’re likely to see further targeting of commercial assets and U.S. maritime ships going forward,” Lim said.

In response to the Houthi attacks, some of the world’s biggest shipping firms have refused to transit through the Suez Canal, complicating flows between Europe and Asia and forcing some vessels to take the more costly route around the Cape of Good Hope. The tensions have also prompted jitters in the oil markets, with crude climbing more than 2% as New Year trading opened.

“There is a real risk of escalation here and we’ve already seen some of that unfold in the last few days,” said Dina Esfandiary, a London-based senior adviser for the Middle East at the International Crisis Group, referring to the death of 10 Houthi fighters in an exchange with the U.S. Navy Sunday. “The Houthis have made it clear they are not afraid to follow through on their threats.”

On Monday, Iran’s Foreign Minister Hossein Amirabdollahian blasted what he called the West’s double standards on Gaza, accusing the U.S. and its allies of caring more about disruptions to global trade than civilians being killed in Israel’s bombardment of the Palestinian enclave. Israel says its aim is to destroy Hamas, which attacked on Oct. 7 and is designated a terrorist group by the U.S.

Amirabdollahian’s comments followed a meeting with Mohammed Abdulsalam, one of the most senior figures in the Houthi movement, and talks on Sunday with U.K. Foreign Secretary David Cameron, who told him Tehran had to rein in the rebels.

“Iran will continue to support the will and desire of the Yemeni people,” Amirabdollahian said.

Joel Rayburn, a former U.S. diplomat and military commander, said the Iranian leadership has chosen to take bold steps against Israel and the U.S., including in the Red Sea, as part of a strategy to project its own power in the region.

Still, Iran may be reluctant to enter into a direct war with the U.S., not least after Washington’s loose implementation of sanctions allowed Tehran to boost oil exports.

“This Iranian destroyer is just for media consumption, targeting a domestic and regional audience — displaying Iran as a regional power capable of deploying naval assets to challenge the U.S.,” said Riad Kahwaji, the Dubai-based head of the Institute for Near East and Gulf Military Analysis. “But it is unlikely that this destroyer will confront the Western warships in the area because Tehran does not want to get in a war with the U.S.”

Moreover, traders say the bigger threat would be any disruption within the Strait of Hormuz.

A hypothetical Hormuz closure could see crude prices surge 20% within a month and potentially higher thereafter, according to Callum Bruce, a London-based analyst at Goldman Sachs Group Inc. That scenario appears unlikely, though, as it would probably prompt a more forceful global response, he said.

Even so, the Houthis feel emboldened, benefiting from greater popular Arab support since the Israeli attacks on Gaza, according to Esfandiary.

“If the tit-for-tats get out of control and each side refuses to abide by the other’s red lines, then we have a real powder keg here,” she said.

With assistance from Arsalan Shahla.

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