Eilat Port Faces New Threat After Houthi Red Sea Takeover

The Houthi rebels' seizure of the Bab al-Mandab strait, a crucial chokepoint at the southern entrance to the Red Sea, has heightened global concerns over maritime trade. This strategic move, alongside control of the Strait of Hormuz, effectively places Iran in control of approximately 35% of global oil transit. While the international community focuses on this development, Israel's Eilat Port has been grappling with a severe downturn for nearly three years due to the Houthi blockade.

Before the current conflict, vehicle imports were Eilat Port's primary revenue source, with around 150,000 vehicles arriving in 2023. However, no vehicles have arrived in 2024 or 2025 following Houthi actions, including the hijacking of a ship bound for Israel and alleged attacks on tankers heading to the country. This situation persisted into the first two months of 2024.

Recent data from Reshafon indicates a slight recovery, with approximately 5,900 vehicles passing through in March, an additional 11,000 between April and June, and 4,400 in July. These figures were achieved through creative solutions, including unloading cargo in Jordan's Aqaba Port. Despite ongoing efforts to establish new routes, the recent Houthi takeover of the Bab al-Mandab strait raises fears of a return to the previous crisis, potentially blocking even the current sophisticated transit methods.

Even with these workarounds, Eilat Port's current vehicle import numbers remain significantly lower than pre-war levels. From January to July 2023, the port handled about 111,000 vehicles, compared to Ashdod's 93,000 and Haifa's 44,000. In the same period of 2024, Eilat received only around 21,000 vehicles, a decrease of 90,000 from the previous year, while Ashdod and Haifa each handled approximately 60,000. Eilat's share of Israel's vehicle imports has thus dropped from 44.4% to about 15%.

The Israeli government has shown little public concern regarding the port's struggles. A Knesset Economic Committee discussion in June addressed the Eilat Port concession, set to expire in January 2028, and the blockade's impact. MK Oded Forer criticized the government's inaction, calling the situation a "disgrace" and a strategic problem. Transportation Minister Miri Regev is recused from the port's concession tender due to a conflict of interest, with the matter now under the purview of Finance Minister Bezalel Smotrich.

Adding to the port's challenges, the Eilat Port Workers' Committee claims the current operator has not met the terms for extending their contract, necessitating a new tender or alternative solution. The port's CFO stated that two out of three conditions for extension were met, but the third, container activity development, is economically unfeasible. The company wishes to continue operating the port. As Eilat Port navigates the ongoing blockade and the looming tender threat, the impact of the Houthi escalation remains uncertain, potentially nullifying recent recovery efforts.