MenuIt has been over six months since the Houthis, a Yemen-based Iranian-backed militia, began attempting to hold the world’s economy hostage by attacking civilian shipping in the Red Sea, a vital trade corridor between Europe and Asia. It was quickly recognized that the Houthis had to be stopped. The West responded with “Operation Prosperity Guardian,” a multilateral force to protect civilian shipping and attack Houthi aggressors.
Although oil prices stabilized, marine insurance rates returned to a higher equilibrium than before the start of hostilities, and input shortages that plagued manufacturers like Tesla, Volvo, and Suzuki were resolved, it does not appear that the Houthis (or their Iranian paymasters) have been contained. After a months-long, exhausting, and inconclusive running battle with the US Navy, the Houthis managed to sink a second cargo vessel in mid-June. Maritime shippers are suffering declining volumes of traffic and insurance markets are unlikely to be reassured by the presence of military assets.