On 16 January 2025, the Israeli government and Hamas signed a truce agreement concerning the Gaza conflict, based largely on the terms outlined in May 2023. This ceasefire, set to begin on Sunday, 19 January, has also prompted a temporary halt to Houthi attacks on cargo ships heading to or from the Suez Canal. In 2024, these attacks forced most container ships to reroute around Africa, significantly increasing travel times and costs.
Abdulmalik Al-Houthi, the leader of the Yemeni Houthi movement, announced that they would honour the truce, albeit with conditions. In a speech on 16 January, he stated that the Houthis would monitor the implementation of the Gaza agreement and warned that “any violations, massacres, or Israeli sieges” would prompt immediate military support for the Palestinians. While he did not elaborate further, it is likely that such support could include a resumption of attacks in the Red Sea.
On the Israeli side, The Times of Israel cited reports from Channel 12 and Walla indicating that Finance Minister Bezalel Smotrich has called on Prime Minister Benjamin Netanyahu to resume hostilities in Gaza after the initial 42-day phase of the truce. This phase includes a partial prisoner exchange, a gradual withdrawal of Israeli troops, and the provision of humanitarian aid. Furthermore, Smotrich’s far-right party has threatened to leave the government if the agreement is approved during a parliamentary vote.
The precarious nature of the truce is leaving many experts sceptical about an immediate return to normal operations along the Suez route. Lars Barstad, CEO of Frontline Management, expressed concerns on X (formerly Twitter), stating it would be “a bit naïve” to expect a swift resumption of Red Sea transits given the persistent risks of attacks. Similarly, Lars Jensen, CEO of Vespucci Maritime, noted on LinkedIn that shipping companies would need assurances of long-term stability before resuming operations in the region.
As of now, major shipping companies are adopting a wait-and-see approach. A spokesperson for Hapag-Lloyd told Reuters that the company would closely monitor developments and assess the impact on Red Sea security. Meanwhile, Maersk stated that it is too early to speculate on timelines. Existing route plans for 2024 account for both scenarios, and Jensen predicts it may take until mid-February to determine whether container ships will re-enter the Red Sea.
Insurance premiums for war risks (AWRP) in the region remain a significant factor. Currently, premiums stand at approximately $150,000 for a medium-sized vessel, with Lloyd’s Joint War Committee designating the area as high-risk. Even if shipping companies decide to return, several weeks of preparation and normalisation would likely be required before operations could stabilise.
