//The Wire//2130Z January 17, 2024//

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//BLUF: RED SEA ATTACKS CONTINUE.//

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-International Events-

Middle East: Iran continues to conduct ballistic missile strikes. Strikes have been reported in Pakistan, targeting alleged Israeli-linked groups within southwestern Pakistan. Strikes have also been reported in Syria, targeting ISIS factions within the northwestern districts of the country.

Red Sea/HOA: Yemeni targeting of commercial shipping continues as before. This morning, another (as yet unidentified) commercial vessel was struck by a Houthi drone in the Gulf of Aden. This comes as reports surface indicating global insurers are restricting coverage for vessels transiting the Red Sea, due to the ongoing conflict.

Diplomatically, the White House has announced that the Houthi-controlled Yemeni government will be again classified as a specially designated global terrorist group next month. AC: As a reminder, the Houthi regime was previously classified as a specially designated global terrorist group and a Foreign Terrorist Organization (which is the most serious diplomatic classification that can be applied in this situation). In 2021, almost immediately after Biden’s inauguration, these classifications were removed by the State Department.

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Analyst Comments: As more companies begin to divert logistics routes away from the Red Sea, many logistical sectors are preparing for this crisis to settle in for the long haul. Yemeni forces have so far mostly focused targeting efforts on container ships bound for western ports, or ships that are in some way affiliated with Israel (which current traffic deviations around the Cape suggest is substantial). However, an important distinction must be noted: The last two vessels targeted by Yemeni forces were not container ships…but rather bulk cargo vessels. Consequently, concerns are increasing that commodities may begin to feel the pressure, not just consumer goods bound for western ports. Additionally, POL and LNG tankers have not substantially been targeted by Yemen. If tankers begin to be targeted in earnest, more substantial economic impacts will likely not be able to be suppressed or manipulated by artificial financial markets.

Analyst: S2A

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