According to the UK Maritime Trade Operations, electronic interference, particularly with GPS, continues to pose a threat to navigational safety in parts of the Middle East. While the overall level of interference has decreased since a military conflict between Iran and Israel in June, localized reports of strong disruptions persist in the Strait of Hormuz and off Port Sudan. This, combined with ongoing threats from Houthi militants, has kept Red Sea traffic significantly below normal levels.
Red Sea Traffic and Houthi Threats
Houthi militant attacks on merchant ships in the Red Sea have severely impacted traffic through the Bab al-Mandab Strait. Latest data shows that the average daily ship transits have dropped to 26 in the week ending August 3, a stark contrast to the over 70 daily transits seen before the attacks began in October 2023.
This decline is due to a Houthi warning that all ships calling at Israeli ports would be targeted. Total cargo volumes through the strait have also fallen significantly. As a result, many ship operators are choosing to reroute around the Cape of Good Hope, a journey that adds approximately two weeks to Asia-Europe voyages and increases shipping costs.
Lingering Risks and Repercussions
Industry participants believe that shipping companies will continue to avoid the Red Sea due to lingering security risks. The Houthis, after a seven-month pause, resumed their attacks in July, sinking two Greek bulk carriers and causing the presumed deaths of four crew members. The militants recently issued warning letters to 64 shipowners for trading with Israel, further solidifying the perception of continued danger in the region.
The rerouting of ships has also had a ripple effect on the bunkering industry, with marine fuel sales at African ports increasing. For instance, bunker deliveries at Mauritius’ Port Louis doubled in 2024 compared to the previous year.
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Source: S&P Global
