Since Israel’s assault on Gaza began, Houthi militants in Yemen have fired missiles on ships from western companies traveling through the Red Sea and the Suez Canal, leading all major companies to re-route their ships around the southern tip of Africa. Lengthening the trips leads to higher costs for oil and other goods. To combat the attacks, the U.S. announced the creation of a task force of allied countries to operate in the Red Sea and defend ships travelling through, hoping to reassure them.
#trade #shipping #redsea #suezcanal #houthi
Last current event we have here is last piece of foreign policy we have stuff going on developments with the Palestine Israeli conflict yeah so I mean it’s kind of an offshoot of what’s happening in Gaza in that recently the houthis in Yemen which are kind of a militant group
Terrorist organization which are backed by Iran have been firing missiles and attacking with drones ships that are going through the Red Sea and specifically the Suz Canal so about 12% of all shipping is done through the Su Canal every year it’s the fastest route from Europe and Africa into Asia um but
The houthis in protest of Israel’s bombing of Gaza have been attacking ships that have gone through there now so this is massively interrupting trade already 12 major ship ship shpping companies have announced that they’re stopping shipments through the canal and instead is routing them around Cape Horn
At the southern tip of Africa which adds weeks to the duration of these trips and of course a lot of cost to them as well right the inefficiency is insane not going through the Suez Canal yeah it’s it’s terrible um so today the US launched a multinational operation to
Protect shipping companies going through the canal the US Navy has already been in the Red Sea attempting to shoot down whatever houy missiles and drones it sees coming in um but they don’t have the capacity on their own to cover all of the area that they want to and so
Secretary of Defense Lloyd Austin said that the UK Bahrain Canada France Italy the Netherlands Norway sell and Spain would all participate in the program which is a very good sign um it’s not clear if they’ll act the same way as the US um but they are going to be helping in some
Way at least it’s interesting that you said that it doesn’t seem like we have the resources necessary to cover the whole shipping route I think we don’t talk enough about the inefficiencies in the US military I shouldn’t say inefficiencies but the lack of ability that we do have we see we think about
The US military as this overall Behemoth super superhero that can do everything um and it honestly can’t there we we should do a deep dive on this I think I would like to because I think it we have a large uh deficit in the amount of guns
We produce in the amount of artillery shells we produce in our overall artillery capacity even if we were to ramp it up we have large deficits in this and now we see that the United States now needs to work with other countries more than it had to even to
Decades ago to secure peace and Security in certain regions of the globe yeah we’ve been we’ve been pulling back and part of that has been consciously right because it’s going to be less in our interest to patrol the global Seas um and and of course we’re spread thin
Right now right we’ve been trying to Aid Ukraine in their War we’ve been supplying Israel and their assault of Gaza not to mention we’re constantly um running uh running fonops in the South China Sea drills to try to establish the freedom of navigation there while China is trying to claim the
Whole South China Sea as its own and encroaching upon the exclusive economic zones of other countries in the region so we’re just we’re needed in too many places right now to be able to assist every region to the fullest of our capacity and I like that the United
States looks like they’re working more with their Partners than they did in the past like we’re making a decisive effort to be like hey can like let’s let’s have you guys cover this section you guys cover this section and it looks like they’re trying to rope the National
Security of the world and into a larger Mosaic of Nations rather than just have the us at it alone like think about the war in Iraq was like really just the United States and and the UK right all of Europe didn’t follow us for rightful reasons but the point is it looks like
America has more of a reason and a more desire to paint that Mosaic picture of national and International Security than it did two decades ago yeah and I wonder how much of that is a strategic um plan on their part not only to paint the picture but also to go to
Their allies and say hey we are too stretched legitimately we can’t just go do this all on our own we need some of your ships to come in and help us Patrol yeah yeah the one other point I’ll make is oil prices are already Rising because of the situation because of the length
Of the shipping routes and that’s a very kind of detached way to look at it I think but this did get me thinking about how when when the prices rise for these basic necessities for fuel that creates our energy those those prices are they burden the people at the lowest end of
The economic spectrum the most for sure so if this if this initiative can help more oil go through the suos canal and be delivered much more cheaply than it is when it goes around the cape or when it goes around Cape Horn I’m on board
Yeah for sure for sure I think like yeah I don’t want to make this too this is so gross econom like economy bro of me but like oh God it’s going to hurt our inflation report next month right like are you serious like we ju we are just
Rounding the corner yeah as I’m saying this like December January February last year was some of the worst months if we can get the average down on those months this year oh man we’ll be chilling if this causes oil prices to rise kiss that
Out the window no it’s I I hear you and even past the us there were concerns reported on in this article about or from the global Community about global inflation being restarted because of this yeah so I certainly hope not totally unacceptable you cannot interfere with global trade like this absolutely not