“Operation Prosperity Guardian: Will it Secure Red Sea Shipping Routes?”
The recent announcement of Operation Prosperity Guardian, a military operation aimed at protecting commercial shipping in the Red Sea, was met with skepticism and jokes about the Seychelles. This joint operation involves only 10 partners, as opposed to the existing 39-nation partnership of Combined Task Force 153 in the Red Sea.
There is uncertainty surrounding the details of Operation Prosperity Guardian and whether escorted convoys will be implemented. Ship brokerage Braemar stated that providing naval escorts for commercial vessels may not be feasible due to the large number of ships transiting the Red Sea. If Houthi rebels continue to attack ships in the region, coalition forces might resort to retaliatory strikes in Yemen, potentially escalating military action.
The current fallout from the Red Sea crisis is primarily impacting container shipping, with most vessels rerouting around the Cape of Good Hope. In contrast, bulk commodity ships and tankers are still transiting the Bab-el-Mandeb Strait. The rerouting of container ships will require additional capacity, leading to higher container freight rates.
Despite the challenges faced by the shipping industry, tanker markets have seen an increase in rates for vessels transiting the Red Sea. There has been a rise in stock prices for container lines, particularly Israeli carrier Zim, while owners of Suezmax crude tankers and product tankers have also experienced gains.
Overall, the situation in the Red Sea poses significant risks to the shipping industry, with potential consequences for global trade and supply chain operations. The outcome of Operation Prosperity Guardian remains uncertain, with stakeholders closely monitoring the situation for further developments.
