SOURCES on the internet report that Operation Prosperity Guardian has ended with the Houthis victorious.
Prosperity Guardian was a US-led operation that aimed to create a corridor in the Red Sea that will allows ships to pass through the area safely, while at the same time, fighting off the Houthis.
People close to the shipping industry report that that US ships, particularly, the USS Eisenhower, have left the region.
I can’t confirm how much of this is true since I can’t find any info on the news, but I am inclined to believe the report.
The situation in the Red Sea has not changed, and Houthi attacks are continuing. What this basically means is that the world – not just the West – has lost the Red Sea. It means the weakening of the Suez Canal and the reorientation of global shipping into different routes.
It’s worth mentioning that shipping still makes up around 80% to 90% of all trade, and a big part of that trade flows through the Red Sea and adjacent areas. If the US and its allies can’t keep it open, it will affect their reputation, yes, but the consequences will affect everyone. Remember, even Chinese and Russian flagged vessels were attacked by the Houthis (by mistake supposedly).
At any rate, that’s the situation and I doubt it will change even if the war in Palestine ends. So what happens next is a new normal for foreign trade.
Trade between Europe, Asia and Africa will be more expensive. Asian and European economies will weaken, shipping costs will become unpredictable and there will be winners and losers.
Egypt, for example, is a big loser as the loss of Suez Canal traffic has harmed its economy by a big margin. China, too, might suffer from the rise of export costs.
African countries may be winners, since trade has to pass around their continent. Russia, too may become a big winner, if they can complete their trans-arctic route.
But more important than the economic problems are the political ramifications of the Houthi attacks. It will force trade down into new paths, and with it, capital. Where capital goes, power follows. What that means in concrete terms is yet to be seen./PN
