Houthis Signal Potential Pause in Red Sea Attacks Following Gaza Ceasefire

The Houthi group in Yemen has indicated a potential halt to its months-long attacks on commercial ships in the Red Sea, following a ceasefire agreement between Israel and Hamas, Bloomberg reports.

This announcement, however, comes with caveats that leave the shipping industry wary of a return to normalcy.

Houthi leader Abdulmalik Al-Houthi, in his first public remarks since the Gaza truce was announced on Wednesday, stated that the group would adhere to the agreement, suggesting a cessation of its attacks on vessels and on Israel. However, he also cautioned that the attacks could resume if Israel breaches the ceasefire, leaving ambiguity as to whether “military support” for Palestinians would entail attacks on ships or on Israel.

Ship owners and insurers have been closely monitoring the Houthis’ intentions in the southern Red Sea and Gulf of Aden after months of missile and drone attacks that have sunk some vessels, damaged many others, and forced a vast majority to avoid the critical trade route. The Houthis and Israel have also been engaged in direct military exchanges.

The US-backed Gaza agreement is slated to commence on Sunday, contingent upon approval by Israel’s security cabinet on Friday. The Houthis, a US-designated terrorist organization supported by Iran, initiated their attacks in late 2023, citing solidarity with Palestinians amidst the ongoing Israel-Hamas conflict. They had previously pledged to continue attacks until the fighting ceased.

Due to the ongoing attacks, many Western-linked container ships have opted for the lengthier route around southern Africa when sailing between Asia and Europe, avoiding the Red Sea. This has resulted in a tightening of global shipping capacity, increased freight rates, and boosted the profits of carriers like Mitsui OSK. Container shipping giants A.P. Moller Maersk A/S and Hapag-Lloyd AG previously announced a vessel-sharing partnership for this alternative route.

The impact of these disruptions is underscored by Egypt, which reported a loss of at least $7 billion, or some 60%, in revenue from the Suez Canal last year due to the rerouting of shipping traffic.