Traffic in the Red Sea falls 30% due to Houthi attacks, according to the IMF

Merchant ship traffic through the Red Sea has dropped by 30% this year due to attacks by Yemen’s Houthi rebels, the International Monetary Fund said Wednesday.

“Merchant ship traffic (…) decreased by almost 30%“, indicated Jihad Azour, director of the Middle East and Central Asia department of the IMF, highlighting that “trade decline accelerated earlier this year”.

According to the IMF’s PortWatch platform, the volume of transit through the Suez Canal, which connects the Red Sea with the Mediterranean, decreased by 37% between January 1 and 16, 2024 compared to the same period last year.

Since Nov. 19, Houthi rebels, who control large parts of Yemen, have carried out more than 35 attacks on ships in the Red Sea and Gulf of Aden, according to the U.S. Department of Defense.

This has caused a disruption to maritime traffic in this crucial area, through which up to 12% of global trade passes.

The Houthi rebels, backed by Iran, say they want to prevent ships linked to Israel from sailing off the coast of Yemen, “in solidarity” with the Palestinians of the Gaza Strip, devastated by the war between Israel and Hamas that began on October 7.

Their attacks have forced many shipowners to avoid the sector and have to skirt Africa to cover routes between Asia and Europe, with a corresponding increase in transport costs and delivery times.

In response, the United States and the United Kingdom have launched several attacks to destroy Houthi installations in Yemen but so far the rebels retain their firepower.

European naval mission

“The level of uncertainty is extremely high and the evolution of the situation will determine the magnitude of the change and the modification of business models in terms of volume, but also in terms of sustainability.Azour told reporters.

“Are we on the verge of a major change in trade routes or is it temporary due to rising costs and deteriorating security costs?“, he asked himself.

The United States, Israel’s main ally, has created a coalition to patrol in the Red Sea and “protect” traffic from Houthi attacks, which it describes as “terrorists”, without being able to stop them for the moment.

The Red Sea is also vital for trade in the European Union (EU) and last week the European Commissioner for Trade, Valdis Dombrovskis, indicated that traffic through that sea had fallen by 22% in a month.

The EU is attempting to launch its own naval mission in the Red Sea to help protect international shipping.

EU countries have already given their initial support to the plan and are waiting to finalize it at a meeting of the bloc’s foreign ministers scheduled for February 19.