Crisis Overview
Since late 2023, Houthi forces in Yemen have conducted systematic attacks on commercial shipping in the Red Sea and Gulf of Aden, disrupting one of the world’s most critical trade arteries. The Bab el-Mandeb strait, connecting the Red Sea to the Indian Ocean, handles approximately 12-15 percent of global trade. Attacks using missiles, drones, and naval mines have forced major shipping lines to divert vessels around the Cape of Good Hope, adding 10-14 days to Europe-Asia transit times and increasing shipping costs significantly.
Impact on Oman
The Red Sea crisis has created an unexpected opportunity for Oman. Ships diverting around the Cape of Good Hope pass along Oman’s coastline, and ports at Salalah and Duqm have benefited from increased bunkering, transhipment, and service demand. Salalah port’s location near the Gulf of Aden entrance positions it as a natural staging point for rerouted traffic. However, the crisis also disrupts Oman’s own export routes to European markets and increases import costs for goods sourced via the Suez Canal route.
Strategic Implications
The crisis underscores the vulnerability of chokepoint-dependent trade and validates Oman’s strategic investment in Arabian Sea port infrastructure. Duqm’s location – accessible without transiting either the Strait of Hormuz or the Bab el-Mandeb – gives it a unique risk-mitigation value proposition. The crisis also highlights the Yemen conflict’s spillover potential and Oman’s role as a border state that must manage security implications. Oman’s diplomatic relationships with Houthi leadership provide some protection but do not eliminate risk.
Long-term Outlook
Whether the Red Sea disruption is temporary or represents a structural shift in maritime trade patterns has profound implications for Oman. A protracted crisis accelerates the case for alternative logistics routes and ports, benefiting Oman’s infrastructure investments. Resolution would restore normal trade patterns but the demonstrated vulnerability of Red Sea transit will permanently alter risk calculations for shippers and insurers. Oman should plan for both scenarios while leveraging the current disruption to demonstrate the value of its port and logistics infrastructure.