The U.S. and Yemen’s Houthis have agreed to a ceasefire in a deal brokered by Oman. The Houthis will stop attacking vessels in the Red Sea and Bab al-Mandab Strait but say their campaign against Israel will continue.

Experts warn that it is too early to expect safe shipping conditions as the region is “far from stable”. Dryad assessed that non-U.S. vessels, especially those tied to Israel, remain at high risk. “This announcement doesn’t yet justify a change in our regional risk posture,” the firm stated.

For shipping to truly return to normal, war risk insurance ratings must be removed but this has not yet happened. The Joint War Committee in London has not downgraded the threat for the Red Sea region or Bab al-Mandab Strait, even though no confirmed attacks on commercial ships have occurred since late 2024.

Meanwhile, the possibility of escalation persists without a complete ceasefire. “The agreement does not include Israel in any way, shape or form,” Mohammed Abdulsalam, the chief Houthi negotiator, told Reuters. Earlier this year, Houthi forces stopped targeting global shipping during an Israel-Hamas truce but resumed threats when that deal collapsed.

The ongoing classification of the Red Sea region as a high-risk area may be good news financially for shipping companies, particularly container lines. Diversions around the Cape of Good Hope have soaked up excess capacity and driven freight rates higher. But Xeneta’s Chief Analyst, Peter Sand warned, “Of all the geo-political disruptions impacting ocean container shipping in 2025, conflict in the Red Sea continues to cast the longest shadow, so any meaningful return to the region would have massive consequences.”

Source: Seatrade Maritime News