Bab-el-Mandeb Is Open, But Commercial Disruption Is Already Taking Hold

The Bab-el-Mandeb Strait remains open to commercial shipping, but the latest NERAI assessment suggests that physical closure is increasingly the wrong threshold for judging risk in the Red Sea. The corridor has already entered a period of selective operational disruption, with vessel traffic falling sharply following the July Houthi blockade targeting Saudi Arabia before stabilising at a lower level. Tanker traffic has been affected more heavily than container shipping, creating an operating environment in which the waterway remains usable but is no longer functioning normally across all segments.

That distinction is important because commercial disruption can develop well before a maritime chokepoint becomes physically inaccessible. Shipowners, charterers, insurers and cargo owners respond to different thresholds. A corridor may remain open while certain vessels divert, war-risk premiums rise, chartering decisions change and operators become increasingly selective about the voyages they are willing to accept. In that environment, the question is not simply whether ships can transit Bab-el-Mandeb, but whether enough of the market remains willing to do so at an acceptable cost and level of risk.

NERAI’s corridor model reflects that distinction. It places the probability of a material disruption event at 15.8% over two weeks, 47.0% over four weeks and 74.6% over eight weeks. These figures are not probabilities that Bab-el-Mandeb will formally close. They represent the probability that operating conditions deteriorate materially, potentially through a combination of vessel attacks, carrier avoidance, insurance repricing or wider regional escalation. The steep rise over the eight-week horizon therefore points to growing transition risk rather than an expectation of an imminent physical blockade.

The changing Saudi energy picture makes that transition particularly important. Bab-el-Mandeb oil flows rose from approximately 5.4 million barrels per day in the first quarter of 2026 to around 8.1 million barrels per day in the second quarter as Saudi Arabia redirected crude away from the Strait of Hormuz towards Yanbu and the Red Sea. The western route has consequently become more important at precisely the moment when Houthi activity has again placed Saudi energy and logistics infrastructure inside the operational risk environment. July attacks against Jizan and attempted strikes against Yanbu underline the vulnerability of a corridor originally designed to provide resilience against disruption elsewhere.

This creates a broader corridor problem. Saudi Arabia’s East-West pipeline provides an alternative to dependence on Hormuz, but greater use of that alternative also concentrates more strategic weight on Yanbu, the Red Sea and Bab-el-Mandeb. The resilience gained in one geography therefore creates greater exposure in another. This does not mean Saudi export capacity is about to fail, but it does mean that Hormuz and Bab-el-Mandeb can no longer be analysed as separate chokepoints. Pressure in one increasingly changes the strategic importance of the other.

Insurance may become one of the most important transmission mechanisms between security risk and commercial disruption. The Joint War Committee has already expanded the relevant Red Sea Listed Area, while NERAI’s JWC-Cast model places the probability of another Listed-Area change within six weeks at 31.6%. A further amendment, materially higher war-risk premiums or tighter underwriting restrictions could alter commercial behaviour without any change in the physical accessibility of the strait. If the cost or contractual burden of transiting rises sufficiently, operators may increasingly favour the Cape of Good Hope even while Bab-el-Mandeb remains technically open.

The uneven impact on vessel types is therefore worth watching closely. Aggregate traffic numbers alone can obscure the change taking place underneath. Tankers have already experienced greater disruption than container shipping, and this divergence may provide a better indication of commercial risk tolerance than total vessel counts. The critical signal would be a broadening of avoidance beyond tanker traffic into major container operators or other mainstream shipping segments. Likewise, a shift in Houthi targeting from Saudi-linked vessels towards wider commercial shipping would materially change the current operating environment.

NERAI’s base case nevertheless remains one of managed escalation rather than sustained closure. The report assigns a 55% probability to contained pressure with selective disruption continuing, a 30% probability to expanding confrontation and partial commercial closure, and 10% to systemic regional escalation producing sustained effective closure. The remaining 5% is reserved for mixed outcomes. The report therefore does not argue that Bab-el-Mandeb is about to shut. Its more important conclusion is that the commercial space between normal operations and physical closure is becoming increasingly consequential.

For now, the most important indicators are whether tanker traffic continues to recover, whether major container carriers alter Red Sea routing, whether attacks begin clustering over short periods, and whether insurers further tighten terms. Saudi military posture also matters: a move from defensive absorption towards sustained retaliation against Houthi positions would represent a significant change in the conflict structure. Egypt provides another secondary indicator, particularly if Red Sea pressure begins to appear simultaneously in Suez traffic, insurance conditions or wider economic stress.

The broader lesson is that a maritime chokepoint does not have to close before it becomes commercially disruptive. Bab-el-Mandeb can remain physically navigable while a growing number of companies decide that the cost, insurance burden or security exposure no longer justifies using it. The decisive change may therefore come not from a blockade declaration, but from a series of quieter decisions made by underwriters, shipowners and chartering desks. In the Red Sea, the corridor is still open. The more important question is how much of the market will continue to treat it as commercially normal.