Yemen’s Red Sea Crisis Is Changing Global Trade | Professor Jiang

Added: 2026-05-12

[00:00:00]Let me be direct with you from the outset because what is unfolding in Yemen right now demands directness.

[00:00:06]Everyone is focused on Gaza. Everyone is asking whether Israel's campaign will expand into Lebanon, whether Iran will intervene directly, whether a regional war is inevitable. But that is not the story. What we are witnessing is not a conflict contained to the eastern Mediterranean. It is not a temporary disruption to shipping lanes. What we are witnessing is the systematic restructuring of global maritime commerce and it is happening in a narrow body of water that most Americans could not locate on a map. I am looking at shipping data that has been compiled by Lloyd's list intelligence over the past 6 months. And I need you to understand what it shows because what it shows is not a temporary reduction in traffic. It is not a minor rerouting of vessels. It is not a diplomatic inconvenience that will resolve itself once negotiations conclude. What it shows is a 73% reduction in containership transits through the Bab elementup straight since November 2023. 73% and sunshine. That is not a fluctuation. That is not seasonal variation. That is the collapse of a critical commercial corridor that handles 12% of global seaborn trade. In the next 20 minutes, I am going to walk you through exactly why Yemen's Ansara movement has achieved what no military blockade in modern history has accomplished. Why the United States Navy cannot stop it despite deploying carrier strike groups worth billions of dollars.

[00:01:36]And why your grocery bills and fuel costs are about to reflect a geopolitical shift that began in the mountains of northern Yemen. This is the analysis you are not getting from mainstream outlets. Subscribe now if you have not already because what we are about to cover is being actively studied by shipping insurers, naval strategists, and supply chain analysts who understand that we are watching the birth of asymmetric naval warfare in the 21st century. Let's start with geography because the Bob Elman straight is not just another shipping lane. The straight connects the Red Sea to the Gulf of Aiden, which means it connects the Suez Canal to the Indian Ocean. It is 18 mi wide at its narrowest point. To put that in perspective, the straight of Hormuz, which everyone fears as a choke point, is 21 May wide. Babel Mandib is narrower and unlike Hormuz, it sits directly adjacent to a failed state with an armed movement that has spent two decades preparing for exactly this scenario. The Yemen coastline along the strait stretches for approximately 300 mentors.

[00:02:42]That coastline is controlled by Ansar which western media insists on calling the house. From that coastline they can observe every vessel transiting the straight, every container ship, every tanker, every military escort. And because the straight is so narrow, those vessels pass within 20 to 30 meters of Yemen territory. That range matters and I will explain why in a moment.

[00:03:06]According to the International Maritime Organization, approximately 62 million barrels of oil transit the Babel Mandib Strait every single day. That represents 8% of global oil shipments. The United Nations Conference on Trade and Development has documented that container traffic through the straight accounted for roughly 30% of global container ship movements before November 2023. past tense before because that number has now collapsed and the global supply chain is absorbing a shock that compounds every single week. Subscribe if you are watching this and realizing you are not getting this level of analysis anywhere else. Now let's talk about what Ansara actually built over the past decade while the world was looking elsewhere. Announcement number one, the anti-ship missile arsenal. And this one matters more than anything else because it represents a capability that most regional analysts did not believe Yemen possessed until it was demonstrated operationally. Ansar law currently operates multiple classes of anti-Hship cruise missiles. The Kudzclass missiles which are based on Iranian designs have a range exceeding 300 kilometers. The Almondab 1 and Almondab 2 systems which were unveiled in 2024 extend that range beyond 400 kilometers. These are not crude cushia rockets. These are radarg guided cruise missiles with active seekers that can track moving targets across open water.

[00:04:37]Commander James Diverus, former NATO Supreme Allied Commander, has acknowledged publicly that these systems represent a genuine threat to commercial and military vessels operating in confined waters. The cost differential is staggering, and this is what breaks the economic logic of conventional naval deterrence. A single coupass missile costs approximately $200,000 to manufacture in Yemen's underground facilities. The container ship it can disable is worth $50 to $200 million.

[00:05:09]The cargo on board can be worth an additional $100 to $500 million. The insurance premium increase to cover that risk now exceeds the profit margin on most commercial routes through the Red Sea. That calculation is what collapsed the shipping traffic, not the missiles themselves. According to reporting by Bloomberg and confirmed by multiple shipping industry sources, war risk insurance premiums for Red Sea Transits increased from 07% of whole value in October 2023 to 5% by January 2024. That is a sevenfold increase for a standard container ship worth $150 million. That represents an additional $750,000 in insurance costs per voyage. The freight rate from Asia to Europe via Suez is approximately $1,200 per container. A large container ship carries 15,000 to 20,000 containers. Do the mathematics. The insurance cost alone consumes 25 to 50% of gross freight revenue before fuel, crew or port fees received. That is announcement number one. Announcement number two, the operational patience that defines asymmetric warfare. This is the part that Western military analysts consistently underestimate. Ansar law did not begin by attacking every vessel in the strait. They began with a declaration in November 2023 that they would target ships linked to Israel or carrying cargo to Israeli ports. Then they demonstrated that capability by striking the Galaxy Leader, a vehicle carrier with partial Israeli ownership.

[00:06:47]They seized the vessel. They did not sink it. They seized it, sailed it to headport and turned it into a tourist attraction. That action was not random violence. It was a demonstration of precision, capability and political messaging. Then systematically they expanded the definition of legitimate targets. First Israeli owned vessels, then vessels carrying cargo to Israel, then vessels owned by companies with Israeli business partnerships, then vessels flagged in countries supporting Israel militarily. Each expansion was announced. Each expansion was operationally validated and each expansion caused another wave of shipping companies to reroute around the Cape of Good Hope rather than risk the Red Sea. The average rrooe from Shanghai to Rotterdam via the Cape of Good Hope adds 3,500 nautical miles and 9 to 14 days of transit time compared to the Suez route. That delay cascades through global supply chains. Manufacturing inputs arrive late. Inventory costs increase just in time. Logistics breakdown. RT arach.

[00:07:54]The Drury World Container Index, which tracks shipping costs, increase by over 170% between November 2023 and March 2024. Those costs embed themselves in the price of everything transported in containers, which is essentially everything you buy that was not produced locally. Stay with me because this is where the narrative completely changes and where the strategic implications become impossible to ignore.

[00:08:21]Announcement number three, and this one almost nobody in the mainstream media is connecting correctly. The United States military response has been operationally successful and strategically irrelevant.

[00:08:33]Operation Prosperity Guardian, the US-led naval coalition established in December 2023, includes destroyers from the United States Navy, the Royal Navy, and token participation from a handful of regional allies. These vessels carry Eegis combat systems. They carry SM2 and SM6 interceptor missiles. They have successfully shot down dozens of Yemen drones and missiles. The interception rate for detected threats exceeds 90%.

[00:09:01]And it does not matter. It does not matter because the economic logic has already shifted. Here is why. An SM2 interceptor missile costs approximately $24 million. An SM6 costs approximately $43 million. The Yemen drones being intercepted cost between 20,000 and $100,000 depending on the model. The missiles cost $200,000 to $500,000. The United States is spending $2 to $4 million to intercept threats that cost a fraction of that to produce and Ansar law can manufacture these systems in hardened facilities that are extremely difficult to target from the air. The US and UK conducted multiple rounds of air strikes against Yemen military infrastructure beginning in January 2024. According to the Pentagon's own assessments, these strikes degraded between 10 and 30% of Ansar's offensive capability. Then what happened? The attacks continued because the production facilities are underground, dispersed, and continuously replenished with components smuggled through Oman and via fishing vessels from Iran received. That is announcement number three. Now let's talk about what is really happening behind the headlines because there are two stories playing out simultaneously and the mainstream media is only covering one of them. The first story is the military confrontation, the missile launches, the interceptions, the air strikes that is theater. The second story is the commercial recalculation and that is the story that will reshape global trade for the next decade. Every major shipping line has made the same calculation. Meyer suspended Red Sea transits in December 2023, resumed them briefly with military escorts in January 2024, then suspended them again indefinitely. MSC, CMA, CGM, HP AG Lloyd, and Costco all followed the same pattern. These are not political decisions. These are actuarial decisions. The insurance underwriters at Lloyds of London are pricing the risk and the price reflects a judgment that the threat is persistent, credible, and unacceptable for commercial shipping operations. Think carefully about what this represents. When the largest shipping companies in the world conclude that a route through internationally recognized waters is too dangerous to use despite the presence of multiple Western naval vessels. That is not a temporary disruption. That is a permanent adjustment to the geography of global commerce. The Suez Canal handled 13 billion tons of cargo in 2022. That traffic has been cut by more than half.

[00:11:40]Egypt is losing 500 to 700 million in monthly canal revenue. European manufacturers are paying 20 to 40% more for components from Asia. And the United States Navy, despite spending billions on patrols and interceptors, cannot make shipping lines change their risk assessment. The Biden administration responded by launching air strikes and declaring that freedom of navigation would be maintained. That declaration has not notably changed the commercial calculations. The Trump administration has suggested even more aggressive military postures. Those suggestions have not made insurance premiums decline because the fundamental problem is not solvable through conventional military force. You cannot shoot your way out of asymmetric cost ratios. If you operate a business with any supply chain component that touches Asian manufacturing, what is happening in the Babel Mandebra is not a Middle East story. It is a cost of good story. If you purchase consumer electronics, furniture, automotive parts or clothing, the 9 to4day delay and the double shipping costs are embedding themselves in retail prices. Right now, the inflation you are experiencing is not purely monetary policy. It is partially a function of a naval blockade executed by a movement that controls no navy. This pattern has repeated throughout history and every time it repeats, the outcome is the same.

[00:13:06]Asymmetric warfare breaks conventional military logic because it operates on different cost curves and accepts different definitions of victory. The Vietkong did not defeat the United States military in setpiece battles.

[00:13:20]They made the cost of occupation politically unsustainable. in Washington. The mujaheden in Afghanistan did not destroy Soviet tank divisions.

[00:13:30]They made every supply convoy vulnerable until the Soviet Union concluded the war was unwininnable. The Somali pirates in the 2000s did not sink Western navies.

[00:13:40]They made maritime insurance so expensive that shipping companies paid ransoms and rude rather than fight. And Sara Law is executing the same playbook in the Babel manned upstraight. They are not trying to sink American destroyers.

[00:13:55]They are making commercial transit economically irrational and they are succeeding. The United States is playing the role of the Soviet Union in Afghanistan, spending vast resources to protect a route that commercial actors have already abandoned. The shipping companies are the ones making the strategic decision. and they have decided that the Cape of Good Hope, despite being 3,500 memoirs longer, is the safer and more predictable route.

[00:14:24]The parallel is exact. High-tech military power versus lowcost asymmetric threats. Conventional forces optimized for peer conflict versus irregular forces optimized for persistence.

[00:14:36]Short-term tactical victories versus long-term strategic exhaustion. And in every historical case, the side with higher costs and shorter timelines eventually withdraws regardless of battlefield performance. So where does this leave us? Let me give you three clear paths because there is no honest middle ground here. Path one, diplomatic resolution. The United States brokers a ceasefire in Gaza that satisfies Ansara's stated conditions which include an end to Israeli military operations and the lifting of the blockade. Anserod declares victory, suspends Red Sea operations, and shipping normalizes within 60 to 90 days. Insurance premiums decline. Traffic returns to the Suez Canal. Egypt recovers canal revenues.

[00:15:21]Global supply chains stabilize. The conditions required for path one are a fundamental shift in US Middle East policy and Israeli acceptance of terms they have rejected for 6 months. The likelihood is extremely low in the current political environment. Both the Biden and Trump administrations have demonstrated they will not pressure Israel to accept a ceasefire that Ansar law would recognize as legitimate path to indefinite stalemate.

[00:15:51]The current situation persists. US naval forces remain deployed. NSAR law continues sporadic attacks. Shipping companies continue Cape of Good Hope routing. Red Sea traffic remains suppressed by 60 to 80%. Insurance costs stay elevated. Supply chain delays become the new normal. European manufacturers adjust to higher costs and longer lead times. Egypt permanently loses half its canal revenue. This path requires no dramatic decisions. It is simply the continuation of present trends. The cost is distributed globally through slightly higher prices and slightly slower logistics. Most consumers never connect their target receipt to a missile launched from Yemen. This is the most likely path because it requires no political will, no negotiations, and no admissions of failure. Path three, military escalation. The United States decides that freedom of navigation requires the complete destruction of Ansar's military infrastructure. This means a ground invasion of northern Yemen or a sustained air campaign targeting leadership, production facilities, and support networks. It means casualties.

[00:16:59]It means a commitment of forces that are already stretched across Europe, the Pacific, and the Middle East. And it means repeating the same pattern that failed in Iraq, Afghanistan, Libya, and Syria. The triggers for path three would be a successful strike on a US naval vessel or a mass casualty attack on commercial shipping that creates political pressure for overwhelming response.

[00:17:26]The consequences would be another multi-year military commitment in a country that has never been successfully occupied by foreign forces. The Ottomans tried, the British tried, the Egyptians tried, all withdrew. Yemen's geography, tribal structure, and fighting culture make occupation prohibitively expensive for any external power. I think we are settling into path two, the indefinite stalemate, whether policymakers admit it or not. The commercial rooting has already happened. The insurance premiums reflect a permanent threat assessment.

[00:18:00]The naval deployments will continue because no administration wants the political cost of withdrawal. But those deployments will not restore commercial confidence. We are witnessing the normalization of a world where the Bob Elmondab Strait is a contested waterway where the Suez Canal operates at half capacity and where the Cape of Good Hope becomes the primary shipping route from Asia to Europe despite being vastly longer. Here are the questions I want you to take away. First, if a non-state actor with no navy can effectively close a straight that handles 12% of global trade, what does that mean for the other choke points that global commerce depends on? Second, if insurance calculations now outweigh military escorts in determining shipping routes, has naval power lost its primary peaceime function? Third, if the cost to defend a shipping lane exceeds the value that lane provides, at what point does strategic withdrawal become the rational choice.

[00:19:01]Tell me in the comments what you think the administration does next. Tell me if you believe path one is still achievable or if we have already committed to permanent stalemate.

[00:19:13]We will keep tracking every development in Yemen, the Red Sea, and the global supply chain disruptions that are rippling outward from this conflict.

[00:19:21]That is what this channel does every single day. Subscribe now. Share this analysis with everyone in your network who is trying to understand why their costs are rising and their deliveries are delayed. Turn on notifications so you do not miss the next update. And we will see you in the next analysis.