Xeneta: Ocean Carriers Unlikely to Return to Red Sea in 2026
The conflict between the U.S., Israel and Iran may well put off any real hope of a return to Red Sea container ship traffic for the rest of this year, according to Xeneta chief analyst Peter Sand - if Houthi rebels follow through on a pledge to resume strikes.
Before last weekend's U.S.-Israeli strike on Tehran, leading western container lines were just beginning to test the waters of the Red Sea again, hoping that a truce with Iran-backed Houthi rebels in Yemen would hold. During the Gaza conflict, the Houthis built up a demonstrated capability to attack merchant vessels off the Yemeni coastline. The group sank four ships and killed at least eight seafarers with ballistic missile, drone and unmanned-boat strikes over the course of two years.
When the Gaza conflict came to a close in October 2025, the Houthis pledged to suspend attacks on Western shipping. The group incorporated a caveat: they reserved the right to resume attacks in the event of further regional conflict. After the U.S. and Israel struck Iran last weekend, Tehran instructed its Houthi proxies to start striking U.S.-allied merchant vessels once more, Houthi officials told the AP on Sunday.
Whether the Houthi group will follow through is uncertain, especially since its Iranian sponsors are now fighting a high-intensity war of their own. But ocean carriers are not staying in the Red Sea to find out if the security situation will deteriorate further. Maersk and CMA CGM have already announced a suspension of use of the waterway and a resumption of the far longer Cape of Good Hope route.
Under the circumstances, ocean freight is unlikely to return to Suez at scale for the rest of the year, according to Xeneta's Peter Sand.
"If Houthi militia resume attacks, as now seems likely, carriers will reverse the decision to return services to the Red Sea and prioritize the safety of crew, ship and cargo. Any plans for a phased return of container shipping to the Red Sea in 2026 will be shelved until the security situation becomes clearer," Sand said in a weekend update.
As during the previous round of Red Sea disruption, the use of the Cape of Good Hope route will be excellent news for carriers' profitability. Sand estimates that the route's extra length absorbs about 2.5 million TEU worth of boxship capacity out of the global fleet of 34 million TEU, shrinking available transport supply by roughly seven percent. The renewal of this route will help offset newbuild deliveries and prevent low rates from sliding further.
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Carriers also have to deal with the closure of the Strait of Hormuz, and the declaration of a designated high risk area for much of the Gulf of Oman. Iran has threatened to attack Western shipping interests in the Strait, and has already struck at least half a dozen tankers. In response, leading P&I clubs and their reinsurers are pulling war risk cover for the entire region, effectively putting the Arabian Gulf off-limits for insurance purposes.
"There is no viable alternative to getting containers in or out of ports such as Jebel Ali by ocean if Persian Gulf is off limits. Carriers will instead omit these calls on east-west services and drop boxes at a least-worst alternative port for onward transportation by road," said Sand. "This will cause severe disruption and port congestion at a regional level, but will not have a major impact on a global scale when compared to the seismic influence of conflict in the Red Sea."
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