U.S. Gaza Plan Fuels Ongoing Tensions in Red Sea

US President Donald Trump’s proposal to take over Gaza has hit hopes of a return to the Red Sea route after more than a year of disruption, according to shipping executives.

Trump’s shock announcement this week has raised fears that Yemen’s Houthi militant group could renew its threat against commercial ships crossing the Red Sea, after declaring last month that it would stop targeting most vessels following the Israel-Hamas ceasefire.

Jan Rindbo, chief executive of commodities shipping group Norden, said Trump’s plan added “to this picture of turmoil and tension in the Middle East and that could prolong the Red Sea issue”. The announcement increased “the risk that the Houthis are not just going to sit tight,” he added.

Trump’s Gaza proposal exacerbated the uncertainty his unpredictable approach is creating for trade and the shipping industry. In his first days in office, the president’s tariff threats on several trading partners reignited fears of trade wars and global economic decline that could hit shipowners’ earnings.

The Houthis’ announcement on January 19 that they would lift sanctions on ships, except those registered in Israel or wholly owned by Israeli entities, has been followed by a slight increase in shipments past Yemen. Since launching their campaign in late 2023 in support of Gaza’s Palestinians, the Houthis have threatened all ships heading to Israeli ports, as well as those owned by UK and US entities.

The number of transits through the Bab-el-Mandeb strait that enters the Red Sea past Yemen rose 4 per cent to 223 in the week following the Houthis’ announcement, according to Lloyd’s List Intelligence. Of these ships, about 25 had avoided the area since 2023 or had not historically sailed through the strait, it said.

One liquefied natural gas carrier that recently left Oman is set to transport the first non-Russian LNG cargo across the Red Sea in more than a year, according to commodities data firm ICIS. The Salalah LNG is signalling for a Turkish port with an estimated arrival of February 16, suggesting it would have to take the Red Sea route to arrive on time.

Bridget Diakun, maritime risk analyst at Lloyd’s List Intelligence, said that while “a small number of vessels are returning”, others were still “waiting for proof of stability”.

But more shipowners were now bracing for an escalation in Middle East tensions and for the Houthis to backtrack on their promise to limit attacks, said executives.

Lars Jensen, chief executive of Vespucci Maritime, which provides advisory services to shipowners and traders, said early hopes of a return to passage through the Red Sea had been dashed.

“A week ago there was a light at the end of tunnel,” said Jensen. But now “the likelihood of a return to the Red Sea is reduced”.

Source: Valor Econômico

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