0Deutsche Bank Research | Adrian Cox (+44) 20 7541 7775 | January 2024Deutsche BankResearchRed Sea red alert 101:Tension in the global supply chainJanuary 2024Adrian CoxThematic Research(+44)-20-7541-7775adrian.cox@db.comGalina Pozdnyakova(+44)-20-754-74994galina.pozdnyakova@db.comPerry Kojodjojo(+852)-2203-6153perry.kojodjojo@db.comSamira Kalla(+44)-20-754-16768Samira.kalla@db.comImage by DALL-EIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. MCI (P) 041/10/2023. UNTIL 19th MARCH 2021INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.Distributed on: 30/01/2024 05:31:06 GMT7T2se3r0Ot6kwoPa1Deutsche Bank Research | Adrian Cox (+44) 20 7541 7775 | January 2024Red Sea red alert: tension in the global supply chainAttacks by Houthi rebels from Yemen on ships in the Red Sea since mid-November have halved cargo traffic in a corridor that carries about 12% of global trade and once again exposed the fragility of the world’s physical supply chains. This report, the latest in our 101 series for generalists, reviews how the crisis came about, why the conflict in Gaza is spilling into the wider Middle East and what it means for oil and trade. The stakes are higher still after the drone attack which killed three US troops in Jordan this week and which the US says was likely carried out by militias supported by Iran.The Iran-backed Houthis have attacked more than 30 ships squeezing through the Bab el-Mandeb at the southern end of the Red Sea in support of the Palestinian militant group Hamas, which has been fighting Israel since October. They originally targeted ships with ties to Israel but since the US and UK launched retaliatory strikes have attacked their vessels too. Container ships and oil and gas tankers have been forced to take the longer route around Africa’s Cape of Good Hope, adding some nine days or many more to the journey.The disruption could help reshape the global supply chain. Europe’s tough but successful pivot to alternatives to Russian oil and gas since the invasion of Ukraine has shown how this new crisis may accelerate the momentum away from dependence on energy and shipping in this volatile region.Source: Media reports including Reuters, Financial Times, Deutsche BankSource: Deutsche Bank dbDIG Primary Research0200400600800100012001-Jun15-Jun29-Jun13-Jul27-Jul10-Aug24-Aug7-Sep21-Sep5-Oct19-Oct2-Nov16-Nov30-Nov14-Dec28-Dec11-Jan25-JanTotal TEU of Container Ships (thousand)Container ship transits across major shipping routes, westbound traffic, 7 day sumTransit Bab El Mandeb NW boundTransit Cape of Good Hope W boundTransit Suez Canal N bound2Deutsche Bank Research | Adrian Cox (+44) 20 7541 7775 | January 2024Three of the world’s chokepoints are caught up in the Israel/Gaza conflict and the regional rivalry between Iran/allies and Western alliesSource: US Energy Information Adminis...
