Red sea threats likely to prevail over

A potential end is in sight to the war between Israel and Hamas that has claimed tens of thousands of lives and upended international supply chains, although last minute wranglings over the terms of a ceasefire are ongoing.

A ceasefire in the conflict that sparked Houthi attacks on shipping in the Southern Red Sea and Gulf of Aden will not immediately remove the risk to ships within the Houthis’ range of attack from the coast of Yemen.

Speaking to Seatrade Maritime News on January 14, Daniel Muller, Intelligence Analyst for the Middle East at Ambrey, said that the Houthi attacks on shipping are closely linked to the war in Gaza as a means of targeting assets linked to Israel and its allies. However, the point at which Houthi attacks will end is unclear, and there is a risk of a return to civil war in Yemen, he warned.

“It is assessed highly unlikely the Israel Defence Forces would withdraw from the Gaza Strip straight away. Therefore, it is assessed unlikely that a ceasefire would immediately result in the Houthi ceasing attacks on merchant shipping. Ambrey assesses the Houthi actions to be linked to Israeli military forces operating within the Strip,” said Muller.

While the details of the ceasefire agreement have not been officially announced, reports indicate that it will bring about a three-stage process, beginning in the first stage with a full and complete ceasefire for six weeks, the release of dozens of hostages, and the withdrawal of Israeli forces from populated areas of Gaza.

The second stage would see remaining Israeli hostages released along with the release of Palestinian prisoners held by Israel, and a complete withdrawal of Israeli troops from Gaza.

The third and final stage is understood to be the reconstruction of Gaza, which has been devastated by Israeli strikes and invasion since October 2023.

“Ambrey assesses the Houthi actions to be linked to Israeli military forces operating within the Strip,” said Muller. If that assessment holds to be true, the Houthi threat to shipping would remain until the end of stage two of the peace process. The risk assessment for ships is complicated by a recent lull in attacks, due in part to reduced Houthi capacity and in part to a lack of viable targets as ships continue to avoid the area within Houthi targeting range. A long break in attacks will need to be assessed against viable opportunities to attack targets considered valid by the Houthis.

Whether the ceasefire progresses or not, the political situation in Yemen will remain of significance to the shipping industry, as developments there could lead the Houthis to target a wider range of vessels.

“A resurgence of the Yemeni Civil War remains possible, which could lead to a change in intent, targeting coalition shipping instead of Israel-affiliated vessels.

The US is reportedly attempting to garner the intelligence support of Saudi Arabia and the Internationally Recognised Government of Yemen to increase the effectiveness of US airstrikes against the Houthi.

“The Houthi have repeatedly warned Saudi Arabia not to intervene against the Houthi’s attacks on Israel. Any active support of US airstrikes in northwest Yemen may be construed as a direct attack against the Houthi and a revival of the Yemeni Civil War. Renewed clashes in Taiz in December 2024 did not lead to an escalation of the internal conflict yet indicated the fragility of the unofficial ceasefire,” said Muller.

Muller said a return to ships transiting the Bab el-Mandeb Strait would be gradual, a point Peter Sand, Chief Analyst at Xeneta, agreed with.

“Xeneta does not expect a full return to Red Sea transits immediately. But the ceasefire may mean that more shipowners will look at the risk differently and therefore perhaps bring ships back.

At first those containerships with a capacity below 10,000 teu, lastly the very large 18,000-24,000 teu containerships,” Sand noted in a Linkedin post.

Sand said a return to the Red Sea will bring increased scrapping in the containership segment, as the market loses the roughly 1.8 million teu of capacity demand sustained by rerouting ships around the Cape of Good Hope. Plans will be in place for the return to the Red Sea, he said, a position supported by the new container alliances due to come online next month, which have published plans for both Suez Canal and Cape of Good Hope rotations.

Freight rates across the container, tanker and dry bulk markets are expected to fall significantly when the Red Sea reopens.