Gulf Ports Face Challenges from Red Sea Crisis

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  • Red Sea Disruptions Impact Gulf Ports’ Performance.
  • Gulf Maritime Trade Challenged by Red Sea Instability.
  • Red Sea Tensions Lead to Volatility in Gulf Port Operations

An uninterrupted scenario awaits the Gulf ports as adjustments in the Red Sea continue disrupting the maritime trade. The key ports of Saudi Arabia, the UAE, and Oman have been mixed-ones have given some thumbs up, while the rest look like failures, reports Container News.

Saudi Port: Growth and Setbacks

Saudi ports witnessed massive growth even with the interruptions on the Red Sea in 2023, with a volume of more than 5 million TEUs. The total tonnage of King Abdulaziz Port witnessed an increase of 9.11% after accommodating 2,516 ships. Saudi Arabia improved its ranking by 17 places on the world scale on the World Bank’s Logistics Performance Index, or LPI.

Challenges and Decline

However, at Jeddah Islamic Port the challenges were higher where the container volumes were down by 14.4% due to issues in global supply chains. The overall maritime traffic at Saudi ports decreased by 11.24%, which speaks about the need for improvement in resilience and diversification. Trends in connectivity also evidenced growth in 2023 but declined in 2024, which indirectly speaks about the operational challenges.

Jebel Ali Port’s Stability

Jebel Ali Port in the UAE continued maintaining operations, handling 19.3 million TEUs in 2023 and ranked 7th in the LPI ranking. Its consistent performance till 2024 evidences its dominant importance as a global transhipment hub.

Geographically unmindful of turmoil in the Red Sea, Jebel Ali has capitalized on its strategic location to its fullest potential coupled with optimum connectivity and global trade ties.

Agreement with New Zealand

The UAE has also been proactive by forming an agreement with New Zealand to open further trade and strengthen the supply chains. These diversification strategies have protected Jebel Ali from some of the geopolitical issues that have affected other Gulf ports.

Oman’s Port of Salalah: Decline Amid Red Sea Crisis

Oman’s Port of Salalah had an examining year: it dealt with 3.8 million TEUs in 2023, down 6% compared to 2022. Container volumes dropped 22% as vessels were diverted around geopolitical tensions in the Red Sea.

Negative sentiment at Salalah is exacerbated by increasing insurance costs due to its dependence on these routes through the Red Sea.

Impacts on Gulf Port Performance

The geographical location of Jebel Ali has protected it from several operational disruptions experienced at Red Sea ports. Saudi ports have been seriously affected, though, by this disruption despite the fact that they heavily invested in port facilities. The economy of Saudi Arabia remains susceptible to shock since it heavily relies on the Red Sea for its trade routes.

Having Oman’s Salalah Port facing similar problems resulting from the Red Sea incident, it then calls for strategic adjustments. The country would have to invest more in its port infrastructure and seek alternative trade relationships.

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Source: Container News