International Maritime

New Houthi attacks likely nix chances of 2025 Red Sea return

By Peter Tirschwell

Israeli operations in Gaza remain a core rationale for ongoing Houthi strikes on commercial ships. Getty Images / Anadolu / Contributor

With no attacks on shipping off the Yemeni coast since December— that is, until two strikes in three days in early July— a feeling was taking hold among some ocean carriers that the threat posed by Houthi militants was greatly diminished.

And as the threat diminished, it would become more difficult for carriers to justify the diversions around southern Africa, which for the past 18 months have absorbed an estimated 10 % of global capacity, extending transit times and putting carriers in a stronger position to absorb an influx of new capacity.

Now, after two attacks in recent weeks, including one that killed three mariners, any thought that the risk was easing— to the point the Suez Canal route might be reopened in the near future— has vanished.

“ The dynamic in the Red Sea has changed materially as compared to expectations roughly a month ago in which there had been a growing view that Red Sea transits would start to pick up following the US-Houthi agreement and the long period in which merchant ships had not been attacked,” investment firm Jefferies wrote on July 8.

Houthi forces may have held fire for several months, but that restraint should not be taken as a sign the group’ s ability to strike is diminished. Despite military setbacks across the network of Iran-backed militia and states such as Syria, analysts say the Houthis remain a lethal force.“ The most recent Houthi attacks … allow them to demonstrate that, unlike Iran and its other proxy groups in the region, they remain undeterred by the threat of US or Israeli military confrontation,” Jack Kennedy, head of Middle East and North Africa country risk at S & P Global Market Intelligence, said in an interview July 9. S & P Global is the parent company of the Journal of Commerce.

The latest show of force will also extend the timeline for any large-scale return to the Suez Canal, quite possibly into 2026.

“ With the developments over the past few days, there is not much chance of a reversal back to a Suez routing for the major container lines in the short to medium term,” shipping analyst and Journal of Commerce contributor Lars Jensen wrote in a July 9 LinkedIn post.

Deep-rooted conflict

Israel and the US have upped their strikes on rebels in Yemen in recent months. But Kennedy has been saying for more than a year that without troops on the ground to uproot the rebels, it would be extremely difficult to eliminate the group as a danger to shipping through aerial military action alone.

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“ Houthi missile attack capabilities are highly decentralized across the territory they control,” Kennedy said.“ These are unlikely to be fully replenished to levels in place prior to US-led and Israeli airstrikes, but seizures of weapons shipments in the Red Sea and the Houthis’ own industrial manufacturing capacity suggest that they will have been able to partially rebuild weapons stockpiles.”

And the original spark for Houthi attacks on shipping— Israeli operations in Gaza— remains a core rationale for their strikes, Kennedy noted.

“ It is highly likely that attack attempts on vessels will continue while Israeli military operations in Gaza are ongoing,” he said, adding that S & P Global expects the attacks to continue“ through 2025 at least.”

“ The dynamic in the Red Sea has changed materially.”

For ocean carriers— who didn’ t create the crisis and are largely immune from criticism for continuing the longer routings around Africa to protect their crews, ships and cargo— the crisis is part of a larger narrative of ongoing disruption in the aftermath of the COVID-19 pandemic, alongside basic supply and demand, underpinning market dynamics.

Carriers face intense profit pressures over the next few years. In June, Drewry said it expects industry operating profit to fall to $ 20 billion this year, down from more than $ 50 billion in 2024. But the pressure would be much greater without the absorption of capacity due to the Red Sea attacks and resultant diversions.

Maersk in May ruled out a return to normal Suez routings this year despite US President Donald Trump on May 6 saying the Houthis“ have capitulated” and agreed to stop attacks on commercial shipping in the region.

But as the new attacks clearly showed, the Houthis were just laying low, meaning the status quo of limited container ship transits through the Suez remains as entrenched as ever.

email: peter. tirschwell @ spglobal. com

August 4, 2025 | Journal of Commerce 17