Houthi Attacks Renew Red Sea Tensions, Casting Doubt on Suez Transits

Prospects for container lines resuming Suez Canal transits were dealt a fresh setback as the Red Sea crisis deepened. The US and Yemen’s Houthi rebels exchanged missile strikes, with Houthi leaders confirming attacks on US warships following American airstrikes.

Former US President Donald Trump justified the strikes as a measure to safeguard international shipping, though analysts suggest they align with broader US efforts to pressure Iran, the Houthis’ key backer. In response, the Houthis vowed to continue targeting US-affiliated vessels, further destabilizing Red Sea trade routes.

The situation also worsened after the Houthis announced renewed attacks on Israel-linked ships, accusing Israel of violating ceasefire terms in Gaza. This escalation places additional strain on the Suez Canal Authority (SCA), which is working to reassure global shipping lines. SCA Chairman Ossama Rabiee held discussions with MSC CEO Soren Toft, who emphasized that rerouting via the Cape of Good Hope remains an unfavorable alternative due to navigational challenges.

Despite these discussions, Toft acknowledged at the recent TPM25 conference in Long Beach that Suez simply isn’t safe to transit at the moment and there is no immediate timeline for resumption. Other major carriers share this sentiment, opting for the longer Cape route amid ongoing security risks.

Shippers at the conference urged urgent intervention to restore safe passage. Tom Behrens-Sorensen, chairman of ECCO Global Shoe Production, criticized the US government’s inaction, stating that freedom of navigation must be protected. Some carriers, including CMA CGM, have cautiously resumed limited transits, raising speculation that others may follow.

However, security experts remain skeptical. Jack Kennedy, head of Middle East country risk at S&P Global Markets Intelligence, warned that the Gaza ceasefire could collapse, triggering further Houthi attacks. He pointed out that while the Houthis claim to target only Israeli, US, and UK-affiliated vessels, nearly two-thirds of their attacks have hit ships with no apparent links to those nations. Kennedy highlighted that the highest risks are near Yemen’s Hodeidah port, where the Houthis store most of their anti-ship missiles and attack drones. He cautioned that vessels in the Red Sea and Gulf of Aden remain at significant risk over the next year, with potential collateral damage from ongoing military operations. As tensions persist, the outlook for Suez transits remains uncertain, with carriers weighing security concerns against operational challenges posed by the Cape of Good Hope diversion.