A tentative calm in the Red Sea has given markets and maritime operators a rare moment to reassess a disruption that has reshaped trade flows and regional economics since late 2023. The return of a handful of cautious transits through Bab el-Mandeb is not a single indicator of recovery. It is a conditional opening, one that exposes how fragile security, insurance, commercial decisions, and state policy are intertwined in determining whether economic relief will be sustained.
The most visible sign of change this month was Maersk’s decision to send a vessel through the Red Sea for the first time in nearly two years. That voyage was explicitly framed as a test rather than a full operational reset. Shipping lines are signaling the same cautious stance. They will require sustained, verifiable reductions in threat levels before they shift the bulk of east west traffic back from the Cape of Good Hope to the Suez route. Even if carriers do resume regular transits, the market effects will be phased rather than immediate.
Insurance and risk pricing will be the gatekeepers of that phased return. Brokers and underwriters reported substantial falls in additional war risk premiums after the October ceasefire in Gaza and the subsequent Houthi pause in attacks. Industry reporting placed additional war risk premiums for Red Sea transits near historical lows reached after late 2023 spikes. Those declines matter because they change the cost calculus for charterers and cargo owners deciding whether to accept Trans Suez routings. But premiums can rise as quickly as they fall if violence resumes. The market has learned to price in episodic shocks.
Traffic metrics show improvement but not restoration. Data cited by international naval mission commanders and shipping analysts indicate daily transits through chokepoints such as Bab el-Mandeb have climbed from the rock bottom experienced in 2024, but remain far below pre crisis volumes. That gap matters. Extended rerouting around the Cape added transit time, bunker consumption, and logistics cost for months, shifting inventories, port calls, and cargo scheduling in ways that do not reverse overnight. Many carriers and shippers have retooled networks for a longer route profile, a structural shift that will blunt any quick rebound in Suez Canal revenue or in the supply chain efficiencies that the canal enabled.
The operational and fiscal incentives on the ground are already being adjusted. State and port authorities in the region and beyond have moved to capture market share or to blunt losses from months of diversion. Some authorities offered fee reductions and operational guarantees to entice return voyages. Those moves are rational given the large slice of global tonnage that transits Suez under normal conditions. Yet incentives alone will not overcome war risk perceptions. Commercial returns require a sustained record of safe transits, credible intelligence on the ground, and predictable international naval cooperation.
A counterpoint to the current optimism is the operational history of 2025. The Houthi campaign did not end in a linear fashion. Several high profile attacks and sinkings earlier this year underscored the lethal capacity of the group and the multispectral tactics it can employ: missiles, armed drones, and unmanned explosive boats. Those incidents created the insurance shocks, the freight rate spikes, and the routing adjustments that still ripple through supply chains. Any analysis of recovery must acknowledge that the security baseline that enabled this calm is reversible.
What does a partial return of Suez transits mean for prices and the real economy? In the short run, a reliable corridor reduces incremental bunker and voyage costs for ships that return to the shorter route. That improvement will feed into a gradual easing of certain freight indices that had climbed during the long diversions. Indeed, container spot indices showed declines in the weeks after de-escalation moves, a signal that market pressure on freight can ease. However, for manufacturers, retailers, and commodity traders the principal effects depend on how shipper networks reoptimize. Some gains will go to carriers and ports which reclaimed lost market share. Other gains will accrue to end consumers only if savings in freight and insurance are passed down the chain. That transmission is not automatic.
Beyond short term freight calculations there are deeper strategic effects to watch. First, rerouting around Africa prompted investment and commercial linkages along alternative corridors and ports. Those investments have created new nodes in global logistics. Second, prolonged insecurity accelerated the adoption of contractual and technical changes, including more robust armed security contingents, convoy transits, and enhanced vessel hardening. Those adjustments raise baseline costs for maritime trade even in calmer periods. Third, geopolitical signaling will shape whether the corridor remains a reliable artery. External actors that supported naval patrols or exerted diplomatic leverage during the crisis will influence the durability of the calm. Economic recovery is therefore as much a political project as a commercial one.
Policymakers and private sector leaders who want recovery to stick should focus on three pragmatic priorities. One, transparently manage risk so that insurance and underwriters can credibly lower premiums over time. That requires demonstrable, maintained reductions in attacks and attacks capability. Two, coordinate port and canal incentives with predictable maritime security arrangements. Temporary discounts help attract traffic but must be paired with guarantees that rebuild confidence. Three, support regional economic adjustments so that gains from restored traffic do not merely reconstitute pre crisis rent capture. Investments in inland logistics and diversified port connectivity will spread benefits more widely and reduce vulnerability to single chokepoint shocks. These steps will not be simple. They demand patient diplomacy and honest assessment of risk.
The current lull is an opening for repair not a certificate of normalcy. If shipping lines, insurers, ports, and states treat the period as the moment to lock in structural resilience the calm could seed broader economic recovery for affected corridors. If they treat it as a brief reprieve and revert to short term gain seeking, the corridor will remain hostage to episodic violence. For observers who study strategic stability, the signal is clear. A functioning trade artery depends on predictable security, not merely the absence of attacks for a few weeks. That is the long term calculus that will determine whether the Red Sea calm becomes the start of economic recovery or a transient lull in an otherwise durable disruption.