The Red Sea crisis: Houthi attacks threaten Saudi Arabia's economic ambitions

By zoeysky // 2025-08-05

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Saudi Arabia's Vision 2030 aims to reduce oil dependence by boosting trade, tourism and manufacturing. But Houthi attacks on Red Sea shipping have severely disrupted maritime traffic, hurting key Saudi ports.
King Abdullah Port (a key Vision 2030 project) saw a 70 percent drop in container ship traffic due to security risks. Jeddah Islamic Port also declined but less severely (14 percent drop), as it handles essential imports rather than transshipment. Many ships now reroute to Dammam (eastern coast) for safety.
The Red Sea coast is central to Saudi Arabia’s non-oil growth, including luxury tourism (Neom) and manufacturing. Overcapacity in regional ports (Saudi Arabia, UAE, Egypt) and weak investor interest are worsening the situation.
Houthis vow to attack ships linked to Israel, making the Red Sea unsafe despite a truce attempt by the U.S. Many shipping companies now take the longer (and costlier) route around Africa to avoid the Red Sea.
Saudi Arabia pushed for a halt to U.S. airstrikes on Houthis, but attacks continue. A Gaza ceasefire may be the only way to stop Houthi disruptions, but the situation remains unresolved.

The ambitious plans of Saudi Arabia to transform its economy and reduce dependency on oil revenues have encountered a significant obstacle in the form of Houthi attacks on the Red Sea. These assaults have disrupted maritime trade and cast a shadow over the kingdom's strategic economic diversification efforts, particularly those centered around the Red Sea ports. King Abdullah Port, inaugurated in 2014, was envisioned as a linchpin in Saudi Arabia's economic strategy. Positioned strategically on Red Sea trade routes, the port was intended to capitalize on transshipment, where goods are transferred from large vessels to smaller ones for their final destinations. The port was also meant to serve as the gateway to the King Abdullah Economic City, a hub envisioned to entice foreign companies and boost manufacturing. However, the reality has been starkly different. Data from ship tracking and maritime analytics provider Marine Traffic has revealed that container ship traffic at King Abdullah Port plummeted by nearly 70 percent, dropping from 188 ship calls in 2023 to a mere 59 in 2024. So far, 2025 has seen only a slight improvement, with 51 container ships arriving. The dramatic decrease in traffic is primarily attributed to the Houthis' maritime attacks, which have deterred international shipping companies from using the Red Sea route. A port executive has said that business at King Abdullah Port is so bad that owners are unable to "sell the container terminal if they wanted to." While King Abdullah Port has been hit hard, another key Saudi Arabian port has also experienced a decline in traffic. The impact on the Jeddah Islamic Port has been less severe, with a 14 percent drop from 400 vessels in 2023 to 344 in 2024. Compared to the King Abdullah Port, the Jeddah port has fared better because it serves as a primary gateway for imports into the western half of the kingdom, rather than relying on transshipment. Nevertheless, the overall trend is clear. Container ships are avoiding the Saudi Arabian Red Sea coast, particularly those arriving from Asia. Instead, they are heading for King Abdul Aziz Port in Dammam on the kingdom's eastern coast. "BYD vehicles destined for Saudi Arabia are going to Dammam. Not the Red Sea Ports. It’s safer," an executive noted, referring to the Chinese electric car maker that is gaining market share in the Gulf.

Houthis escalate their attacks: The broader economic implications

The disruption in maritime trade has far-reaching consequences for Saudi Arabia's economic diversification plans. Crown Prince Mohammed bin Salman's Vision 2030 aims to reduce the country's reliance on energy by expanding relevant sectors such as manufacturing and tourism. The Red Sea coast is a crucial component of this vision, intended to host luxury hotels and factories. Robert Mogielnicki, a resident scholar at the Arab Gulf States Institute, said that the Red Sea is "the most important dimension of the Vision 2030 plan for developing untapped potential - especially non-oil and gas related." Mogielnicki added that when in terms of the countrywide transformation, the Red Sea coast is crucial. However, the port-building boom in the region – involving Saudi Arabia, the UAE and Egypt – has led to overcapacity. To date, there isn't enough trade to match the infrastructure. Moreover, projects like Neom are being scaled back due to weak foreign investor interest and lower oil prices – further complicating Riyadh's economic diversification efforts. The Houthis have been escalating their attacks, pledging to target any vessel associated with companies that have dealings with Israel, "regardless of its nationality and destination." This escalation has raised concerns about the safety of a vital trade route, despite a truce announced by President Donald Trump earlier in May, which was intended to restore freedom of navigation in the Red Sea. The parameters of the truce were unclear, and the Houthis have stated they will continue attacks targeting Israel. The episode has renewed fears that the Red Sea is no longer a safe passage, prompting vessel owners to avoid the area and seek alternative routes around Africa's Cape of Good Hope. (Related: U.S. THAAD defense system makes first missile interception against Houthi attack in Israel.) An Egyptian intelligence delegation told U.S. counterparts that the only way to effectively halt the Houthi attacks is to achieve a ceasefire in Gaza, indicating a lack of appetite for resuming military operations. Visit Chaos.news for more updates about ongoing global conflicts. Watch the full video below of "Brighteon Broadcast News" with the Health Ranger Mike Adams as he discusses Trump's tariffs on countries that produce the transformers needed to build U.S. factories and data centers. This video is from the Health Ranger Report channel on Brighteon.com.

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Houthis escalate their attacks: The broader economic implications

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