The Peter Zeihan Podcast Series - Danger in the Red Sea: Who Shall the Houthis Let Pass? || Peter Zeihan

Episode Date: June 4, 2024

It’s time for an update on the situation in the Red Sea and what the Houthis have been up to as of late. Spoiler alert: most of the ships are taking the longer route around Africa, but there's a handful still navigating this region. Full Newsletter: https://mailchi.mp/zeihan/danger-in-the-red-sea-who-shall-the-houthis-let-pass

Everybody, Peter Zion here coming to you from just outside of Kasi France. I am going to do a quick update on what's going on in the Red Sea with the Houthis right now. As you guys all remember, the Houthis were the group in Yemen who decided to show solidarity for the Palestinians. They decided to start shooting at everyone who happened to sail by and demanding extortion money, because that's what it means to be supportive, I guess. Anyway, it's kind of fallen off the radar in the last month. I'm going to give you an update of what's going on. It's still in play. The ships are still being attacked. The reason that you're not hearing as much about it is most ships are simply avoiding the area now and doing the very, very long sail around Africa.

Now, of the vessels that are getting through, they fall into three general categories. Number one, oil tankers, for the most part, are not being infected. Why? Well, most of the oil tankers are sailing from Arab countries, and the Houthis ultimately have to get their support from somewhere. And yes, yes, yes, Iran is their prime. Mary Backer, but they know that if they start going after oil shipments, the whole world brings a bag of hammers down on them, and so they're just avoiding that overall completely. The second category are green ships and bulfures in general coming from the Black Sea. Now, the vast majority of those are going to be Russian ships, and the vast majority of those are going to either Iran or India. So the Houthis who take many of their marching orders from the Iranians are not going after the cargo of their patrons. And then the third category is container ships that are specifically Chinese flagged. All other container ships, which are the more valuable ships on the seas are avoiding the area

completely. And if you think back, the world's container ships are typically either operated by the United Arab Emirates, by the Danes, or by the Chinese. Well, the Danes and the United Arab Emirates have basically pulled their ships out of the area. That leaves the Chinese. And several weeks ago, the Houthis very specifically target a series of Chinese vessels all in one day, and the Chinese agreed to pay them protection money. So this has definitely evolved away from anything strategic or anything political into a pure protection racket, and that is where we stand right now. All right, everyone take care.