Red Sea shipping crisis worsens after Israel-Houthi attacks

Maritime traffic through the Red Sea — the vital waterway carrying goods from Asia to Europe — had already fallen by nearly 80% when Yemen's Houthi rebels and Israel escalated their spillover conflict from the Gaza war last weekend.

On Friday, the Iran-backed Houthi militia attacked the Israeli city of Tel Aviv from more than 2,000 kilometers (1,242 miles) to the south, killing one person. Israel retaliated a day later with its first-ever airstrikes on Yemen's port city of Hodeida, which the Houthis control, killing six people and wounding 83 others, the Health Ministry in Yemen said.

Last year, the Houthis began attacking ships in the Red Sea in response to Israel's war against the Palestinian militant group Hamas in Gaza, forcing shipping lines to reroute their vessels via southern Africa.

Dozens of ships still ply Red Sea route

Despite the risk, some ships are still opting for the Red Sea route, with dozens of vessels still traversing the waterway that, at its narrowest point, is only 30 kilometers (about 19 miles) wide. The website marinetraffic.com showed more than a dozen ships moving along the Red Sea, with many more in the Gulf of Aden and Arabian Sea to the south of Yemen and Oman.

"It was larger, international container ships that were being targeted [by the Houthis]," Emily Stausboll, a senior shipping analyst at the Denmark-based Xaneta consultancy, told DW. "Smaller, regional vessels haven't been fired at to the same extent."

Stausboll said despite the risk of attack, smaller operators had decided they could still traverse the Red Sea "reasonably safely."

China and Russia were also told privately by the Houthis that their vessels would not be touched, news agency Bloomberg reported in March. The attacks have also been less severe on shipping carrying commodities on bulk carriers and tankers, instead targeting container ships.

Houthi attacks persist, despite rerouting

Despite most vessels avoiding the Red Sea, over the past week alone the Houthis have targeted three ships in the area. During one incident, two drones struck close to the Liberian-flagged vessel Pumba, causing minor damage near Al Mukha, a town south of Hodeida port.

In another attack, a ship's captain reported being targeted by three small craft, which collided with and fired at his vessel. The incidents were confirmed by the United Kingdom Maritime Trade Operations, which is run by Britain's Navy.

Hodeida attack damaged oil storage facilities, port cranes

While Hodeida, which sits along the Red Sea in western Yemen, is not a major stop for international container ships, the facility is Yemen's principal port and a vital entry point for up to 80% of fuel imports, food and other humanitarian aid to the Arabian Peninsula's poorest country.

Completed in 1961 with help from the Soviet Union, Hodeida was seized by the Houthis in 2015 during Yemen's civil war and was attacked three years later by Saudi Arabia, which led the military campaign to restore the country's former, internationally recognized government. The United Nations later agreed on a package of €46.57 million ($50.52 million) to repair damage to the port from the war.

The Houthis said Israel's airstrikes on Saturday had damaged fuel storage facilities at the port and a nearby power plant. An unnamed Hodeida port employee told AFP news agency that the port, containers and ships were left "intact."

The US-based Navanti Group said five container-yard cranes were now "most likely non-operational," while British security firm Ambrey said four merchant vessels were in the port at the time of the attack, Another eight were anchored. Journalist Basem Ganani wrote on X, formerly Twitter, that the port was up and running again within a couple of days.

Independent news outlet Yemen Monitor, meanwhile, cited anonymous sources as saying the damage caused meant the port would not be able to import oil derivatives and gas for the time being and that it could take more than six months to restore normal operations.

Netanyahu: Hodeida no 'innocent port'

The strikes on Hodeida port drew widespread condemnation, with many calling it a blatant violation of international law. But Israeli Prime Minister Benjamin Netanyahu has defended the decision, saying Hodeida is "not an innocent port." The facility was "the entry point for weapons that are supplied by Iran to its Houthi terrorist proxies," which he said were used to attack Israel and Arab states in the region, and others.

Both Israel and the Houthis have since vowed to intensify their attacks on each other. Previously, the Shia Islamist group said it could expand its drone and missile strikes on maritime trade across the region. The attack on Tel Aviv and recent strikes on another Israeli city, Eilat, confirms the Houthis do have the ability to strike much longer-range targets.

"[The Houthi attack on Tel Aviv] does underscore their previous threat to also target shipping in the eastern Mediterranean — and by extension, this means that not only the southern Red Sea but also the full extent of the Red Sea could potentially be a risk area for shipping," Vespucci Maritime CEO Lars Jensen warned in a post on LinkedIn.

Shipping costs remain elevated

The rerouted trade avoiding the Red Sea has meanwhile, caused congestion at ports in Asia and Europe and spiked shipping costs. Rerouting ships around South Africa's Cape of Good Hope takes up to two weeks longer than through the Suez Canal — the extra fuel alone is estimated to cost $1 million (€0.92 million) per sailing, according to LSEG Shipping Research.

Container ship prices from the post-COVID supply chain issues helped spark inflation two years ago and there are concerns an escalation between Israel and the Houthis could have a further knock-on effect on consumer prices.

The detour is also having an environmental impact as the shipping sector's carbon emissions jumped by 23 million tons in the first half of the year, Bloomberg reported. Emissions from container vessels have climbed 15% over the same period.

The result, Xaneta's Stausboll told DW, was that record-high volumes and tight capacity meant that "as a shipper, you were forced to pay what the carrier demanded, to secure space on board ships. Some shipping lines were so overrun that they had to "pick and choose" which containers made the journey, she added.

"In the early weeks and months, we were talking about when shipping would return to the Red Sea. That looks increasingly far off [after the latest attacks]," Stausboll said. "Some commentators are now using the term 'if.' I'm not quite that pessimistic, but we're clearly settling into the long haul of these new trade patterns."

Edited by: Uwe Hessler