East African importers are bracing for increased costs following threats by Yemen's Iran-backed Houthi rebels to block Saudi-linked vessels passing through the Bab el-Mandeb Strait, a critical maritime corridor connecting the Red Sea to the Gulf of Aden.

Previously refraining from involvement in the Gulf crisis, the Houthis recently announced a "maritime embargo" targeting Saudi-affiliated ships navigating the strategic waterway. This development has heightened insecurity in the region, pushing oil prices above $100 per barrel for the first time since May.

Strategic Importance of Bab el-Mandeb

The Bab el-Mandeb Strait, situated between Yemen, Djibouti, and Eritrea, handles approximately 12% of global trade and 7% of the world’s oil shipments. It is a vital channel for East Africa's imports, linking the region to Europe, the Mediterranean, and the Middle East.

The Port of Mombasa, East Africa's busiest seaport, depends heavily on traffic through this route to serve Kenya, Uganda, Rwanda, Burundi, South Sudan, eastern Democratic Republic of Congo, and northern Tanzania.

Regional Ports Prepare for Possible Disruptions

Kenya Ports Authority Managing Director Captain William Ruto confirmed that Mombasa and Lamu ports are ready to handle vessels that may reroute due to the tensions.

  • "At Mombasa and Lamu, we are ready to assist vessels that change routes and require our services. Business must continue despite these challenges, and KPA is equipped to handle increased traffic," Captain Ruto said.

While Kenya briefly gained from previous Gulf tensions when some ships diverted to Lamu, the current situation threatens to increase operational costs for importers dependent on Middle Eastern markets.

Shipping Lines Adjust Routes Amid Threats

Data from the Automatic Identification System (AIS) revealed at least three oil tankers, including the Singapore-flagged Xin Long Yang and Liberia-flagged Rodos, reversed course near Bab el-Mandeb. Another vessel, the Hong Kong-flagged New Prime, also turned back after nearing the Gulf of Aden.

Elijah Mbaru, CEO of the Kenya Ships Agents Association, noted that shipping companies are taking precautionary measures, withholding vessel schedules for security reasons. He warned that prolonged threats could lead to higher fuel prices and disrupted supply chains, although no Houthi attacks have occurred since the latest threats.

Economic Impact on East Africa

Countries like Kenya, Uganda, and Rwanda, which rely heavily on imported petroleum, could face broader economic challenges beyond fuel price hikes. Kenya has already reduced VAT on fuel to mitigate the impact on consumers and extended this relief recently.

Experts warn that if vessels avoid the Red Sea, they would have to navigate around South Africa's Cape of Good Hope, extending voyages by nearly a month and increasing freight, insurance, and fuel costs. John Kariuki, a Mombasa petroleum dealer, highlighted that these additional expenses would ultimately be passed on to consumers.

The ripple effects include higher transport costs, increased expenses for diesel-powered electricity generation, and rising prices for food, fertiliser, and manufactured goods across East Africa.

The United Nations Conference on Trade and Development has cautioned that sustained disruptions at key maritime chokepoints could add over $20 billion annually to oil import bills in vulnerable developing economies.

Political Context and Responses

The Houthis justify the blockade as retaliation against Saudi Arabia’s prolonged siege on Yemen, accusing Riyadh of restricting access to Yemeni ports and airports for over a decade.

Saudi Arabia condemned the embargo as a violation of international law and maritime piracy, pledging to enhance protection for commercial vessels transiting the Bab el-Mandeb.

The situation remains volatile, with the Houthis having conducted numerous missile and drone attacks on vessels linked to Israel since late 2023, prompting some major shipping companies to suspend Red Sea routes and divert ships around southern Africa.