Red Sea Shipping Reawakens as Suez Canal Sees Cautious Return of Global Trade

Red Sea Shipping Reawakens as Suez Canal Sees Cautious Return of Global Trade

For much of modern global trade, the narrow stretch of water linking the Red Sea to the Mediterranean through the Suez Canal has functioned as a quiet constant. Ships moved, cargo flowed, and supply chains depended on the assumption that this artery would remain open. That assumption was shattered between late 2023 and 2025, when sustained attacks on commercial vessels turned one of the world’s busiest maritime corridors into a geopolitical flashpoint.

As 2026 begins, the Red Sea and Suez Canal are no longer in outright crisis. Yet they are far from normal. What is unfolding instead is a cautious, uneven, and fragile return to operations, shaped as much by geopolitics and insurance calculations as by naval patrols and ceasefires.

This is the story of how global shipping is attempting to find its way back through troubled waters.

A Route Too Important to Ignore

Before the crisis, the Red Sea and Suez Canal together carried roughly one tenth of global seaborne trade. For container shipping, energy cargoes, and bulk commodities, the route provided the shortest link between Asia and Europe. A ship sailing from India or China to northern Europe could save weeks compared with a diversion around the Cape of Good Hope.

That efficiency made the route indispensable, but also vulnerable. When attacks on merchant vessels began escalating in late 2023, the impact was immediate. Major shipping lines diverted vessels south around Africa. Freight rates surged. Delivery schedules became unreliable. Energy markets reacted to longer transit times and higher insurance premiums.

What initially appeared as a regional security problem quickly became a global economic one.

The Peak of the Disruption

Between 2024 and much of 2025, the Red Sea became one of the most militarised commercial waterways in the world. Yemen’s Iran aligned Houthi movement launched missiles, drones, and boarding attempts against vessels it claimed were linked to Israel or its allies. In practice, the threat environment proved far broader, with ships of multiple nationalities targeted or forced to take evasive action.

Naval coalitions led by Western powers sought to deter attacks and protect shipping, but confidence among commercial operators remained low. Even when warships were present, the risk of a single successful strike carried unacceptable consequences for insurers and shipowners.

By mid 2025, traffic through the Suez Canal had fallen dramatically. Some estimates suggested volumes were more than half below normal levels. Egypt, which depends heavily on canal revenues, saw a sharp drop in foreign currency earnings. Global supply chains adapted, but at a cost.

The Ceasefire That Changed the Equation

The turning point came not from the shipping industry itself, but from the wider Middle East. A ceasefire linked to the Gaza conflict in late 2025 altered the strategic calculations of the Houthi leadership. Large scale attacks on commercial shipping largely ceased.

This pause did not represent a formal peace agreement, nor did it dismantle the Houthis’ military capability. However, it created something shipping companies had not seen for nearly two years: a sustained period without major incidents.

Insurers, naval planners, and shipping executives began reassessing their assumptions. Quietly at first, test voyages were planned.

The Slow Return of Major Shipping Lines

In early 2026, the world’s largest container carriers began to take tentative steps back into the Red Sea and Suez Canal. Maersk, a bellwether for the industry, resumed selected services linking the Middle East, India, and the US East Coast via Suez.

These were not symbolic gestures. They were carefully controlled operations, supported by enhanced security protocols and close coordination with naval forces. Each successful transit reduced uncertainty, but none erased it.

Other carriers watched closely. Some followed with limited services. Many did not. The return, such as it is, remains partial.

Why Traffic Remains Well Below Normal

Despite more than three months without major attacks, Suez Canal traffic is still far below pre crisis levels. There are several reasons.

First, insurance markets remain cautious. War risk premiums for the Red Sea have eased but not disappeared. For some operators, the cost difference between Suez and the Cape of Good Hope is still marginal when risk is factored in.

Second, supply chains have adapted. During the crisis, companies rewrote contracts, restructured logistics, and built longer transit times into their planning. A sudden return to Suez is not always operationally convenient.

Third, trust takes time to rebuild. The absence of attacks today does not guarantee safety tomorrow. The Houthis have made clear that renewed regional conflict could prompt a resumption of operations against shipping.

A Region Still on Edge

The Red Sea in 2026 is quieter, but not calm. Naval patrols remain active. Surveillance and early warning systems are still in place. The United Nations continues to monitor incidents and political developments affecting maritime security.

At the diplomatic level, disagreements persist over how the crisis should be framed. Some countries argue that Red Sea security has been over emphasised compared with threats elsewhere. Others see it as a test case for the protection of global commons in an era of fragmented power.

For shipping companies, these debates matter less than outcomes. Stability, not statements, will determine whether vessels continue to return.

Economic Stakes Beyond Shipping

The implications of a full or partial recovery extend far beyond the maritime sector.

For Europe and Asia, a stable Suez route would lower transportation costs, ease inflationary pressures, and improve supply chain resilience. For energy markets, shorter transit times would reduce exposure to disruption and volatility.

For Egypt, the canal is a strategic asset and a vital source of revenue. Prolonged under utilisation has strained public finances and underscored the country’s vulnerability to external shocks.

For global trade, the episode has already left a mark. Companies are more conscious of chokepoint risks. Diversification of routes, stockpiling, and nearshoring are no longer theoretical concepts, but lived experiences.

A New Normal, Not a Return to the Old One

It is tempting to describe the current moment as a recovery. In reality, it is better understood as a recalibration.

The Red Sea and Suez Canal are open, but no longer taken for granted. Shipping decisions are made voyage by voyage, service by service. Security assessments are embedded into commercial planning in ways that were once unthinkable.

This does not mean the route will remain marginal. Its economic logic is too strong for that. Over time, if calm holds, traffic will likely continue to rise.

But the era of assumed permanence is over.

Looking Ahead

The question now is not whether ships can pass through the Red Sea, but under what conditions and at what cost.

If the ceasefire endures and regional tensions remain contained, 2026 could mark the beginning of a gradual return toward normality. If conflict flares again, the fragile confidence being rebuilt could evaporate quickly.

For the world economy, the lesson is already clear. Global trade depends not just on infrastructure, but on geopolitics. When narrow waterways become battlegrounds, the ripple effects travel far beyond their shores.

The Red Sea has always been a meeting point of commerce and conflict. In 2026, it remains both.