The Impact of Houthi Terror Attacks on the Israeli Trade

One might assume that the terrorist attacks by the Iranian terrorist organization ‘Houthis’ in the Red Sea, which started in November 2023, have a massive impact on trade flows to and from Israel.

In 2023, about 22% of the world’s maritime container traffic (in terms of weight) passed through the Suez Canal in the northern Red Sea. A recent study by the Bank of Israel shows, however, that the impact is minimal and hardly significant.

In the press release the Bank of Israel summarized the key findings of its study: “The composition of Israel’s foreign trade indicates that the impact on Israeli exports may be limited because only about $3.4 billion worth of goods, which is about 5% of Israel’s total goods exports, are transported by sea to Asia and Oceania. In contrast, maritime imports from these regions to Israel amounted to about $20 billion in 2023, which is about one-fifth of total civilian imports. However, the analysis found that total Israeli imports from Asia and Oceania did not decline significantly due to the Houthi attacks—either in absolute terms or relative to imports from the rest of the world (…). Import prices to Israel, which include transportation and insurance costs, also did not rise significantly in the first half of 2024. Therefore, the impact of the Houthi attacks and the subsequent diversion of shipping routes on Israel’s foreign trade was likely limited.“(highlighted by VonNaftali)

Rather, it must be noted that Greece and Turkey were the main victims of the terrorist attacks by the Iranian terrorist organization ‘Houthis’.

“In contrast to Israel, the Houthi attacks had a significant but temporary impact on the volume of imports from Asia, Oceania, and East Africa to other OECD countries in the Mediterranean (Greece, Turkey, Italy, France, and Spain). These imports declined in December 2023 and recovered in most of these countries in the spring of 2024,” according to the Bank of Israel and concluded: “(…) Israel’s exposure to the blockage of the Red Sea route is relatively moderate because maritime imports account for a lower proportion of total imports from Asia/Oceania to Israel (65%) than the corresponding proportion to some other Mediterranean countries such as Portugal (78%) and Greece (89%).”