Houthi Advances Threaten Eilat Port With Complete Shutdown

The Houthi movement's recent territorial gains in Yemen, particularly around the Bab el-Mandeb Strait, are pushing the Israeli port of Eilat towards a complete operational halt. Shipping companies are increasingly avoiding the Red Sea route due to escalating security risks, leading to a sharp rise in insurance premiums. Eilat Port officials warn that even the minimal activity currently sustained may soon cease, according to a September 16 report by Ynet.

The Houthis have recently captured the city of Mocha and other coastal areas, reinforcing their presence on Perim Island in the strait and seizing two additional islands. This expansion of control reportedly enhances their ability to disrupt global shipping, potentially allowing them to block the vital waterway with naval mines without needing direct missile attacks. The Bab el-Mandeb Strait is a critical chokepoint connecting the Red Sea to the Gulf of Aden, a primary route for goods and energy from Asia to Europe destined for the Suez Canal and onward to the Mediterranean.

As a consequence, shipping companies are rerouting vessels around the Cape of Good Hope, a significantly longer and more expensive journey, with increased fuel consumption, insurance costs, and operational expenses ultimately passed on to consumers. While the immediate impact on Israel has been minimal, Eilat Port suffered significantly in late 2023 when Houthi attacks intensified. The port's primary business, vehicle imports, largely shifted to Haifa and Ashdod, reducing its annual revenue from approximately 240 million shekels to near zero, marking the most severe crisis in its history.

Despite state attempts at subsidies, the port's concession operators are facing an uncertain future, with the Ministry of Transport and Finance not intending to extend their operating rights. Eilat Port management emphasizes the strategic importance of the maritime route to Israel, stating that any attempt to close it historically led to conflict. To maintain some operations, the port established an alternative route via Aqaba, Jordan, facilitating only 15-20% of its previous vehicle import capacity. To attract ships, the port has offered steep 90% discounts on certain fees, yet monthly activity has dwindled to about one vessel carrying roughly 4,700 cars since March 2026, barely covering essential operational costs for its approximately 100 staff and security personnel.

Eilat Port operators anticipate the crisis lasting at least three years and are seeking long-term state financial support and a ten-year extension of their concession. They urge the Israeli government to join an international coalition to counter the Houthis and reopen the maritime route. Officials express deep concern that current limited operations may become impossible following recent Houthi advances. Hezi Halawi, Chairman of the Israel Ports Company, highlighted the need for developing alternative land-based transport routes, including a promised railway to Eilat, emphasizing that disruptions to maritime trade directly impact the cost of living and economic stability in Israel, given its heavy reliance on sea-based commerce.

Insurance companies have ceased covering Red Sea voyages, designating it a war zone. Professor Yehoshua Krasna, a Middle East and geoeconomics expert, noted the global community's struggle to contain the Houthis, whose decentralized nature makes conventional deterrence difficult. He recalled previous Houthi attacks on Saudi vessels and oil infrastructure, which forced rerouting and increased costs, and warned that similar strikes could recur. Egypt faces significant revenue losses from Suez Canal transit fees, while the United States might benefit from the situation.