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Somali pirates are “taking advantage of the distraction provided by Houthi strikes” in and around the Red Sea to hijack ships in the Indian Ocean, costing shipping companies large sums, Reuters reports.

What’s going on: “More than 20 attempted hijackings since November have driven up prices for armed security guards and insurance coverage and raised the spectre of possible ransom payments, according to five industry representatives.”

• The gangs are willing to take chances attacking these vessels “because the international naval forces that operate off the coast of Somalia reduced their operations,” one financier of the gangs said.
• While the current threat is not as great as it was from 2008 to 2014, officials and industry sources say it could worsen. Since November, pirates have seized two cargo vessels and 12 fishing boats.

Deterrent effect: The Indian navy could have a deterrent effect on continued piracy, however, according to Cyrus Mody, the deputy director of the International Chamber of Commerce’s anti-crime arm.

• Last weekend, the navy freed a ship flying under the Maltese flag after it was held for several weeks by Somali pirates. All hostages were rescued, and all 35 pirates surrendered.
• “This intervention does show that the risk/reward is very much against the pirates, and hopefully that will make them think a few times over,” Mody told the news service.

Why it’s important: “The waterways off Somalia include some of the world’s busiest shipping lanes. Each year, an estimated 20,000 vessels, carrying everything from furniture and apparel to grains and fuel, pass through the Gulf of Aden on their way to and from the Red Sea and Suez Canal, the shortest maritime route between Europe and Asia.”

• At their peak in 2011, vessel hijackings by Somali pirates cost the global economy approximately $7 billion, including hundreds of millions in hostage ransoms.
• The recent raids have expanded the area where insurers tack on additional war-risk premiums, “adding hundreds of thousands of dollars” to the cost of a typical weeklong voyage.

More costs: Shippers are increasingly opting to hire private guards, which is adding to their rising expenses.

• “The cost to hire a team for three days jumped around 50% in February month-on-month, to between $4,000 and $15,000, maritime security sources said.”

Resolution lapse: To put an end to pirate raids more than a decade ago, international naval forces joined NATO operations led by the U.S. and European Union, and shipping firms increased onboard security measures.

• But complicating matters now is “the lapse in 2022 of a U.N. resolution that authorized foreign vessels to patrol in Somali waters.”