A ceasefire deal brokered by Oman between the U.S. and Yemen’s Houthi forces has raised cautious optimism for the shipping industry. Under the agreement, Houthi groups will stop attacking vessels in the Red Sea and Bab al-Mandab Strait. However, they have stated that their campaign against Israel will continue.

Security experts warn it is too early to expect safe shipping conditions as the situation remains volatile. According to Dryad Global,  non-U.S. vessels, especially those tied to Israel, remain at high risk. The firm said that current conditions meant regional risk assessments are unchanged.

War risk insurance remains in place and the Joint War Committee in London has not downgraded the threat  level for the Red Sea region or Bab al-Mandab Strait, even though no confirmed attacks on commercial ships have occurred since late 2024.

The ongoing instability in  the Red Sea region may be good news financially for shipping companies. Container lines have benefitted from the diversions around the Cape of Good Hope, which have soaked up excess capacity and driven freight rates higher.  Yet, experts caution that any meaningful return to the Red Sea routes could dramatically shift market dynamics. 

Source: Seatrade Maritime News