Red Sea Crisis: A Permanent Strategic Framework Reshaping the Global Economy

NYN | Reports and Analyses 

Global trade routes are witnessing one of the most complex phases in modern history, as the ongoing Red Sea crisis continues to impose a new reality on maritime transport, energy flows, and global supply chains.
Current developments are no longer viewed as a temporary disruption but rather as a long-term strategic framework reshaping the economic and political calculations of governments, shipping companies, and decision-making centers in major capitals.

While the Red Sea had traditionally been considered one of the most stable and vital maritime corridors, recent developments—from repeated attacks to the repositioning of shipping companies—have revealed that the region has entered a new phase of uncertainty, forcing deep changes in global trade patterns.

A Global Trade Artery Under Pressure

The Red Sea and the Suez Canal have long formed a vital artery for international trade.
According to a report by News.Az, around 12% of global trade passes through the Bab al-Mandeb Strait, along with nearly 30% of container traffic between Asia and Europe.
This maritime route offers companies a strategic advantage by cutting thousands of nautical miles, reducing fuel consumption, and speeding deliveries between ports in India, China, the Eastern Mediterranean, and Europe.

However, this exceptional importance has made the corridor vulnerable to disruptions amid rising geopolitical rivalries, regional conflicts, and the presence of armed groups capable of targeting vessels with drones and missiles.
Even limited attacks have created a cumulative effect on markets, pushing insurers to raise “war risk” premiums and forcing shipping companies to reroute, causing volatility in shipping standards and driving up costs due to detours around the Cape of Good Hope.

With these developments recurring, companies and governments alike have become convinced that the Red Sea is no longer the reliable corridor it once was.

Bab al-Mandeb: The Most Sensitive Chokepoint

The Bab al-Mandeb Strait sits at the heart of the crisis and is among the world’s most dangerous maritime chokepoints.
Any disturbance in this narrow passage instantly affects global markets, turning navigation into a daily decision subject to shifting security assessments tied to the balance of international naval power and the positions of armed actors in the region.

This impact became clear when major shipping companies were forced to reroute around the Cape of Good Hope, adding 10 to 14 days to travel times and significantly raising operating costs.
The risks are especially acute for countries reliant on tightly scheduled imports of energy or raw materials, where days of delay translate into direct strains on production, inventories, and supply chains.

Shipping Disruptions Threaten Energy Security

Energy markets have been among the most affected sectors. For Gulf states, the Red Sea is a primary route for oil exports, while Europe and Asia rely on it for imports of crude and LNG.
Though alternatives exist—such as pipelines—their capacity and flexibility cannot match maritime transport.

Any threat to the movement of oil tankers is reflected immediately in global prices, increased strategic stockpiling, heightened pressure on energy facilities, and volatility in both short- and long-term contracts.
LNG, whose importance to Europe and Asia has grown since the Ukraine war, has become even more sensitive to delays or rerouting, leading spot markets to react sharply even to limited disruptions.

Marine Insurance: Risk Costs and Reclassification

According to data in the report, the marine insurance sector has undergone profound changes during the crisis.

War-risk premiums have risen sharply, and large parts of the Red Sea have been classified as high-risk zones, leaving shipping companies with difficult choices: absorb the cost, pass it on to consumers, or avoid the region entirely.

Although the reduction in attacks recently pushed war-risk premiums down by roughly 70% compared to their peak in mid-2024, they later stabilized.
Insurance experts warn that any further decline requires a sustained period of real stability—not just temporary calm.

These developments have driven companies to rethink their logistics strategies: diversifying supply sources, adjusting inventory policies, using air freight for high-value goods, and altering purchasing schedules to avoid seasonal bottlenecks. These shifts are seen as structural changes in global logistics thinking.

Alternatives Under Study… But No Full Replacement for the Red Sea

International discussions are increasingly focused on developing alternatives to the Red Sea, including land corridors between Asia and Europe, expanding ports, building multimodal logistics hubs, and strengthening international naval patrols.
However, such projects require years of investment and will not fully replace the passage in the near term—they will merely increase flexibility and reduce dependence on a single chokepoint.

CMA CGM’s Return: A Cautious Turning Point

Despite the risks, notable signs of change have emerged with the announcement that the French shipping company CMA CGM will gradually resume transit through the Suez Canal.
According to ongoing monitoring, the company plans to operate the India America Express line between India, Pakistan, and the United States via the Suez Canal, with the first voyage expected from Karachi next month.

The decision follows indications of halted attacks after the Gaza ceasefire last October. Although CMA CGM declined to comment officially, experts—including Peter Sand—described the move as the clearest shift since the crisis began, noting that the company is no longer making transit decisions strictly “case by case.”

Nevertheless, traffic levels remain below pre-crisis norms: vessel transit through Bab al-Mandeb has reached its highest point in two years but is still roughly half the levels recorded in October 2023.
In contrast, major companies like Maersk and Hapag-Lloyd continue to take a more conservative approach, stressing that any return will be gradual and tied to strict security assessments.

Reshaping the Global Trade System

Indicators point to the Red Sea crisis as a deeply rooted structural issue stemming from prolonged conflicts, regional rivalries, and political fragility—forcing companies and governments to adopt permanent emergency scenarios and long-term backup plans.

The crisis has become a real test of the resilience of the global economy, compelling all actors—from insurers to energy ministers—to reassess their assumptions.
The cautious return of some shipping lines reflects a desire to reclaim the shortest and most efficient route without sliding into uncalculated risks.

Ultimately, the Red Sea is no longer merely a maritime passageway but a powerful factor reshaping global trade routes—not through complete closure, but through the fragility of its security environment.
Source: Buqash + Agencies