- Following a halt in Houthi attacks, the SCA urges shipping companies to return to the Egyptian waterway, citing improved stability.
- The last reported attack occurred on Dec. 2, with the group later pledging to avoid targeting non-Israeli ships.
- Despite reassurances, many operators hesitate to resume Suez transits, leading to continued reliance on the longer African route.
- Crude shipments dropped from 7.9 million b/d in 2023 to 3.9 million b/d in 2024, highlighting the economic impact of security concerns.
The Suez Canal Authority (SCA) has called on shipping companies to restore normal transit through the Red Sea after a reduction in Houthi rebel attacks. Despite assurances of improved safety, most operators remain cautious, continuing to favor the Cape of Good Hope route for Asia-Europe trade, reports SP Global.
Navigational Risks and Cautious Industry Response
Though Houthi attacks have stopped since December 2, 2024, lingering security concerns persist.
The January 28 fire aboard the ASL Bauhinia raised alarms, though authorities confirmed it was not linked to the militant group. Meanwhile, the Bab al-Mandab Strait remains underutilized, with daily ship transits far below normal levels.
Economic Impact: Reduced Oil Shipments & Shipping Costs
Security concerns have significantly affected trade flows, with oil transits through the Suez Canal nearly halving from 2023 levels.
This shift has supported increased bunker fuel consumption and elevated freight rates. The industry is expected to return cautiously, with normal traffic resuming only if stability persists in the coming months.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: SP Global
