Red Sea shipping risk
- Houthi threats to close Bab al-Mandeb have raised renewed shipping risk for Asia–Europe container routes. - The route channels nearly 9% of global oil trade and over 20,000 ships annually, per reports. - Increased naval deployments and war-risk insurance are lifting transit times, insurance costs, and supplier inventory buffers (timesofindia.indiatimes.com).
New threats to the Bab al-Mandeb strait are again putting the Red Sea route between Asia and Europe under pressure. (aljazeera.com) Ali Akbar Velayati, a senior adviser to Iran’s supreme leader, wrote on April 6 that allied forces could disrupt traffic through Bab al-Mandeb, the narrow waterway between Yemen and the Horn of Africa that links the Red Sea to the Gulf of Aden. The strait sits on the southern approach to the Suez Canal route used by ships moving between Asia and Europe. (aljazeera.com) The canal-and-strait system carries a large share of world trade in ordinary times. The United Nations Conference on Trade and Development said about 22% of global seaborne container trade moved through the Suez Canal in 2023. (unctad.org) For energy markets, Bab al-Mandeb is one of the world’s main chokepoints, a narrow passage that concentrates tanker traffic the way a bridge concentrates highway traffic. The U.S. Energy Information Administration said oil flows through the strait averaged 9.3 million barrels a day in 2023, or about 12% of world maritime oil trade that year. (eia.gov) The danger is not theoretical. After Houthi attacks on commercial shipping began in November 2023, oil and product flows through Bab al-Mandeb fell to 4.0 million barrels a day in the first eight months of 2024 from 8.7 million barrels a day in 2023, while more cargoes shifted around the Cape of Good Hope. (eia.gov) That detour adds time and cost because ships skip Suez and sail around southern Africa instead. UNCTAD said 586 container vessels had been rerouted by the first half of February 2024, and container tonnage crossing the Suez Canal had fallen 82%. (unctad.org) Shipping lines had only started to test a gradual return. On May 9, 2025, Suez Canal Authority chief Ossama Rabiee met representatives of 25 major shipping lines and urged them to reassess schedules after what he called improving security conditions in the Red Sea and Bab al-Mandeb area. (suezcanal.gov.eg) Traffic did begin to recover from the worst of the exodus, but not to pre-crisis norms. Lloyd’s List reported that voyages through Bab el-Mandeb reached 1,044 in August 2025, the highest monthly level since January 2024, after shipping companies had pulled back sharply following the first attacks. (lloydslist.com) The International Monetary Fund’s PortWatch platform now tracks these disruptions in near real time using satellite-based shipping data. That makes the Red Sea a live gauge for whether carriers are returning to the Suez route or rebuilding buffers by taking the longer Cape route. (imf.org) For importers in Europe and exporters in Asia, the immediate question is not whether the strait is formally closed but whether shipowners, insurers and naval escorts judge it safe enough to use. That decision, more than any single threat, will determine whether Red Sea shipping risk stays elevated. (eia.gov)
