How quickly things change.
Whereas a resumption of Red Sea maritime traffic seemed certain at the beginning of the year, the majority of the global merchant fleet is anticipated to avoid sailing down the coast of Yemen for the foreseeable future as the security situation in the region continues to deteriorate.
The Israeli military has conducted extensive airstrikes overnight along the Gaza Strip following the collapse of negotiations aimed at extending the ceasefire – attacks that represent the most significant escalation of hostilities since the ceasefire commenced on 19 January.
Following these developments, the Houthis in Yemen are expected to adopt a more aggressive maritime stance, particularly in response to Israeli actions and renewed American military strikes on Yemen.
Houthi leader Abdul Malik al-Houthi has indicated that his forces intend to target US vessels in the Red Sea as a reaction to substantial American strikes on Yemen over the weekend, which have persisted into the new week.
In addition, Houthi rebels have claimed responsibility for another assault on a US aircraft carrier group today, 18 March, marking their third such attack within 48 hours.
Earlier this month, the Houthis declared their intention to resume attacks on Israeli-linked vessels, citing Israel's failure to permit humanitarian aid into war-ravaged Gaza.
Jack Kennedy, who oversees MENA (Middle East North Africa) country risk at S&P Global Market Intelligence, warned that the resumption of US airstrikes heightens the probability of further Houthi aggression against US and allied naval forces in the Red Sea and Gulf of Aden.
He said all vessels in transit face considerable risk due to the unpredictable nature of the Houthis. Data indicates that 63% of ships targeted by the rebels lack a discernible connection to the US, UK or Israel. While the US has stated its objective is to uphold freedom of navigation, the Houthis' decentralised missile capabilities and their ambition to exert regional influence exacerbate the situation, posing a growing threat to shipping and regional stability.
A shipping markets update from analysts at investment bank Jefferies, suggested that US strikes against Houthi positions over the weekend are likely to result in increased insurance costs in the region and deter merchant shipping from passing through these waters.
Furthermore, the Trump administration's efforts to associate any further Houthi attacks with Iran risk escalating the Red Sea shipping crisis to other critical maritime chokepoints.
US President Donald Trump has reportedly stated that any retaliatory strikes by the Houthis will be considered acts of aggression by Iran, with Iran being held accountable. Lars Jensen, head of Vespucci Maritime, who has been closely monitoring developments in the Red Sea for over a year, has remarked that this approach could significantly heighten the risk of escalation, potentially impacting the Strait of Hormuz.
Although there have been no reported Houthi attacks on merchant vessels from Yemen this year, shipowners continue to avoid the Red Sea, much to the dismay of Egypt’s Suez Canal Authority. In fact, avoidance of the region by vessels from the two largest shipping sectors has actually increased this year.
Data from Jefferies indicates a rise in diversions within the tanker and dry cargo segments. Dry bulk vessel diversions have risen to 56% of 2023 figures so far this year, up from 45% in 2024. Similarly, crude tanker diversions have escalated from 35% to 48%, while product tankers have increased from 45% to 52%.
Containership traffic continues to be diverted, with transits through the region in 2025 down 90% compared to 2023 figures. This aligns with the pattern observed in 2024, while LNG and LPG shipments have continued their diversions at similar rates, with 80% and 74% of capacity bypassing the region so far this year, respectively.
According to data from ABG Sundal Collier, overall arrivals in the Gulf of Aden have declined by 72% compared to the 2023 average, a situation that has had a significant impact on the Egyptian economy due to the sharp drop in revenue for the Suez Canal Authority.
There is little indication that authorities expect the Red Sea shipping crisis to be resolved in the near future. The European Union announced last month that it is extending the mandate of its maritime security operation, EUNAVFOR Aspides, for another year. This initiative aims to reinforce efforts to maintain freedom of navigation in the Red Sea and will now continue until 28 February 2026, with a budget exceeding €17 million allocated for its extended duration.
The reopening of the Red Sea to merchant shipping will be a decisive factor in determining financial performance for many shipping companies this year. Senior management at Maersk recently outlined how developments in the region could significantly impact profitability.
The forecast for the remainder of 2025 for Maersk's earnings before interest and taxes ranges from zero to $3 billion, depending on whether the Red Sea corridor reopens in the middle or towards the end of the year.
As reported by Sam Chambers from Asia Shipping Media, the ongoing uncertainty surrounding maritime security in the region is expected to have far-reaching implications for global trade and shipping operations.
