Shipping traffic through the Red Sea has slowed markedly after a series of attacks by Houthi rebels on Saudi-owned vessels, according to reports from Reuters. The incidents, which occurred over the past 48 hours, have forced several shipping lines to reroute or pause transits through the Bab el-Mandeb strait, a critical chokepoint for global trade connecting the Mediterranean to the Indian Ocean.
The disruption comes as a fresh blow to international supply chains already under strain from geopolitical tensions. The Red Sea route handles roughly 12% of global seaborne trade, including significant volumes of oil, liquefied natural gas and consumer goods bound for European markets, including the UK. Analysts at maritime consultancy Drewry warned that even a temporary slowdown could add days to delivery schedules and push freight rates higher.
On London markets, the FTSE 100 fell 0.6% to 8,210 points by midday Tuesday, with oil majors BP and Shell both losing ground despite a rise in crude prices. Brent crude climbed 1.2% to $84.70 a barrel as traders factored in the risk of further attacks. The FTSE 250, more exposed to domestic consumer and logistics firms, dropped 0.8%. Shares in shipping-related companies, including Clarksons and Ocean Wilsons, saw modest declines amid uncertainty over transit times.
For UK investors and pension holders, the development adds another layer of uncertainty. Pension funds with exposure to global equities and commodities may see short-term volatility, particularly in energy and transport sectors. Retailers reliant on just-in-time inventory from Asia and the Middle East could face higher costs, potentially feeding into consumer prices later this year.
“The Red Sea remains a flashpoint, and any sustained disruption will inevitably feed through to inflation metrics in the UK, given our reliance on imported goods,” said Richard Hunter, head of markets at interactive investor. “For now, markets are taking a cautious view, but if attacks continue, we could see a more pronounced risk premium baked into shipping and energy stocks.”
The UK government has not yet issued an official statement, but the Foreign Office is understood to be monitoring the situation closely. The attacks follow a pattern of escalating Houthi strikes on commercial shipping since late 2023, with the group claiming solidarity with Palestinian militants in Gaza.