Red Sea Crisis: Houthi Shipping Attacks, Trade and Escalation

The global economic system is built on trade, and to trade, you need ships and safe, efficient routes. Often, that mean travelling through maritime choke points, where geography squeezes trade through a concentrated point.

In the Red Sea, one of those chokepoints has come under pressure as a result of attacks by the Houthi movement based in Yemen, driving hundreds of vessels to divert to much longer routes around Africa.

Now, US and Houthi forces have exchanged fire, with several Houthi boats reportedly being destroyed attempting to board a container ship.

And beyond the risk of this particular campaign, the sight of relatively cheap attacks reshaping the contours of global trade may serve as a warning to decision makers elsewhere. After all, if technology and techniques can be applied in the Red Sea, why not at other maritime chokepoints around the world?

On that cheery note, welcome to 2024.

Patreon:

Caveats, Corrections & Comments:

There are two flubs in the Audio that need to be mentioned on this one:

Firstly - marine traffic .com, not marine tracker (flubbed because I use it as a tracker I think)

Secondly - prosperity guardian not, as I say *twice*, prosperity garden

Thirdly - there are a few times where i refer to a 'trip' intending to mean a 'round trip' but this is not uniform. I apologise for the ambiguity

all other normal caveats and limitations apply:

In particular – I would like to note as always that this material has been created for entertainment purposes and is not intended to be a complete or comprehensive examination of the topic in question and should not be relied upon to inform financial or other similar decisions.

Relevant Reading (will be expanded when I'm at my other PC):

US CENTCOM

UN Review of Maritime Transport 2023

The CMF

Prosperity Guardian

Houthi boats sunk by US

Reports on disruption and costs:

Houthis:

ACAPS (Yemen control map)

Image of VLS reloading

SM6 upgrades

Timestamps:
00:00:00 — Red Sea Crisis
00:01:14 — What Am I Talking About
00:02:05 — Setting The Stage
00:11:49 — Motivation And Strikes
00:14:04 — Engagements And Targets
00:20:40 — Diversions And The Economics Of Disruptions
00:28:35 — Forces And Responses
00:40:36 — Options For Escalation
00:48:33 — The Chokepoint Problem
00:58:57 — Why This Matters
01:06:32 — Conclusion
01:06:56 — Channel Update

[PerunAU]

Happy new year everyone - apologies in the delay getting this one up but I appreciated the short break, as did the team.

I haven't used this episode for reflections on 2023, as it was recorded before the New Year, but will do so in the coming episode(s).

I hope you find the small audio flub in this episode amusing (surely Prosperity Garden is a decent alternative operation name, right? my sound guy outright refused to remove it as he found it funny) and I look forward to seeing you again later *this* week.

[DannyHeywood]

As a wise man once said:

"Ships need water to do Ship Things"
- Perun 2024

[Limonadetaart]

Such a flex to humbly apologize for being one day late once or twice a year while providing such consistently excellent content every week

[Boatswain_Tam]

As someone working in logistics I'll add this: the pressure on equipment (container boxes). Boxes that are full of goods needs to return empty to areas of manufacturing (ie. Asia) to continue the flow of goods. Longer shipping times means less empty boxes returning & that also puts pressure on shipping rates. Forget about premiums shipping prices that you need to pay, whether or not you can get your stuff on board a ship becomes a challenge in itself.

Don't forget, longer transit time would also mean shipping carriers pull more ships from other shorter haul routes to compensate, meaning routes that you don't think would be affected also gets a rate hike

[elijahsnow]

You were sadly very correct about what would happen when non state actors started using cheaper drones after figuring out the implications.

[Argosh]

Spare a thought for the poor mariners. Crew scheduling is a nightmare at the best of times. This situation will have people stuck in what amounts to purgatory for months...

[AZSprocket]

The level of snark in this video is much bigger than usual. I love it.

[lifeontheX]

While your content on the conflict in Ukraine is important (please don't stop), I find all of your other content so outstanding that it gives very accurate picture of ongoing world events. If I appreciate all the work and research you put into this.

[NanarStudios]

41:02 "The stars and stripes don't have magical power"

BLASPHEMY

[magfal]

Edit: I read an article today that conflicted with the first I read, looks like the ship is flying the Norwegian flag.
I now support it's protection by the Norwegian navy.
My sentiment still applies to the numerous ships that flies flags of convenience.

The owner of the "Norwegian" ship was whining that Norway should come to it's aid.

Nope. you fly a flag of convenience and skip out on tax and reasonable regulations, you get to rely on the nation who's flag you're flying.

[bow-tiedengineer]

Insurance is something bought by people who own things.
Ouch. I feel that so hard.

[Dantick]

Ah yes chem Pluto, the smallest tanker ship. Some would say too small to be considered a tanker

[Kriegter]

The US has the backing of the mighty Seychelles, the Houthis now stand no chance with the Seychelles People's Defence Forces intervening.

[brianwallace]

Perun, I want to wish you a heartfelt, warm New Year’s greeting. As I sit here grading my student’s very well researched major paper in economics while fighting a virus, I am very mindful of how much effort you put into each of your weekly presentations. I would like nothing better than to crawl back into bed and put this off for another day, but marks are due in, and it can’t be put off. Yet here you are, rain or shine, sick or not, travelling or at home, 52 weeks a year, producing amazing topical presentations that require as least as much research as my student’s paper (which took a term to produce). And you do this while holding down a day job. Incredible! and so much appreciated. You have become my Sunday tradition: Coffee, a fresh croissant and Perun. All the best for the new year.

[OneMoreDesu]

I like that because you are Australian you speak with a pace that respects my time and I don't need to speed you up.

[aarongraham]

Honestly it wouldn't be a bad thing if the whole flags of convenience setup was reduced. A lot of the horrific crew conditions on ships are due to a race to the bottom for regulations by convenience flag countries

[Madshadowgolem]

Please consider leaving a 2 second pause at the begining of your video so it loads before the sound starts. Thank you again for your excellent videos!

[kylewhite]

Mate, this is a masterpiece. Excellent work both describing the current situation and predicting how this situation and situations like it will evolve.

[unhumanized]

Its always amazing how impeccable your upload timing is.

[Canoby]

Could we be seeing the birth of a new age of maritime piracy? Or are we just becoming just more aware of what a problem this is, and it just started being an issue for the West recently?