The International Monetary Fund announced on Wednesday that container shipping through the Red Sea has decreased by nearly one-third this year due to ongoing attacks by Yemen’s Houthis.

Container shipping through the Red Sea has dropped by nearly one-third this year as attacks by Yemen’s Houthi rebels continue, the International Monetary Fund (IMF) said Wednesday.

“Container shipping… has declined by almost 30%,” said Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, adding that “the drop in trade accelerated at the beginning of this year.”

The Iran-backed Houthis have launched more than 30 attacks on commercial shipping and naval vessels since November 19, the Pentagon said on Tuesday.

The Houthis say the attacks are in solidarity with the Palestinians and in protest of the Israel-Hamas war that has been raging in the Gaza Strip since October.

The IMF’s PortWatch platform indicates that the total transit volume through the Suez Canal was down 37% this year through January 16 compared with the same period a year earlier.

The canal connects the Red Sea to the Mediterranean Sea.

Houthi attacks have prompted some shipping companies to detour around Southern Africa to avoid the Red Sea, a vital route that normally carries about 12% of global trade, according to the International Chamber of Shipping.

“The level of uncertainty is extremely high, and the developments will determine the extent of change and shift in trade patterns in terms of volume but also in terms of sustainability,” Azour told reporters in an online briefing.

“Are we on the verge of major change in trade routes, or is it temporary because of the increase in costs and the deterioration of the security costs?”

Revised Regional Outlook

Last week the European Union’s trade commissioner said maritime traffic through the Red Sea shipping route had fallen by 22% in a month because of the rebel attacks. The Red Sea is particularly vital for European trade.

The European Union is pushing to launch its own naval mission in the Red Sea to help protect international shipping.

EU countries have given initial backing to the plan and are aiming to finalize it by a meeting of the bloc’s foreign ministers on February 19.

Wednesday’s IMF briefing came as the Washington-based fund released a revised economic outlook for countries in the Middle East and North Africa due to the Israel-Hamas war.

Khalil Wakim, with AFP