Red Sea crisis and the Houthi shipping attacks: what they do to stocks, sector by sector
Last reviewed 2026-10-12 · next review 2027-01-15.
What is happening
Container ships have avoided the Red Sea since December 2023 and have not come back. Freight costs moved; listed shipping shares did not.
About a tenth of everything shipped by sea goes through the Suez route, including more than 14% of the grain and oilseeds.
Three ways it could go
Calm case · Suez Return
Ships start coming back through the Red Sea and the Suez Canal. The Houthis, the armed group in Yemen that has been attacking ships, stop firing, and Saudi Arabia’s blockade stays a threat on paper only. This has not happened yet: traffic is still at its low.
We put the chance of this at about 1 in 7 (very unlikely).
Middle case · Saudi Blockade Enforced
Tankers heading for Saudi Arabia’s Red Sea port of Yanbu come under attack. Any move back to the Suez route stops, ships keep taking the long way around Africa, and the cost of shipping and insuring goods jumps again.
We put the chance of this at about 7 in 10 (likely).
Severe case · Strait Closed
The narrow entrance to the Red Sea is closed to every ship. With Hormuz still disrupted, oil from the Gulf loses its last way out to the rest of the world. This is the worst case.
We put the chance of this at about 1 in 5 (unlikely).
Which sectors are exposed
In the case we rate most likely (Saudi Blockade Enforced), the sectors the model shows most exposed are Luxury (−4.8%), Airlines (−4.4%), EM equities (−4.0%). The model gives no sector a gain in this case.
| Sector | Calm caseSuez Return | Middle caseSaudi Blockade Enforced | Severe caseStrait Closed |
|---|---|---|---|
| Luxury | 0.0% | ▼ −4.8% | ▼ −7.7% |
| Airlines | 0.0% | ▼ −4.4% | ▼ −7.0% |
| EM equities | 0.0% | ▼ −4.0% | ▼ −6.4% |
| Financials | 0.0% | ▼ −3.6% | ▼ −5.8% |
| EM bonds | 0.0% | ▼ −2.8% | ▼ −4.5% |
| Autos | 0.0% | ▼ −2.0% | ▼ −3.2% |
| Broad market | 0.0% | ▼ −2.0% | ▼ −3.2% |
| Energy producers | 0.0% | ▼ −2.0% | ▼ −3.2% |
| Reconstruction | 0.0% | ▼ −1.8% | ▼ −3.0% |
| Big tech | 0.0% | ▼ −1.6% | ▼ −2.6% |
| LNG | 0.0% | ▼ −1.6% | ▼ −2.6% |
| Agriculture & food | 0.0% | ▼ −1.6% | ▼ −2.6% |
| Gulf producers | 0.0% | ▼ −1.6% | ▼ −2.6% |
| Defence | 0.0% | ▼ −1.3% | ▼ −2.2% |
| Semiconductors | 0.0% | ▼ −1.2% | ▼ −1.9% |
| Container lines | — | — | — |
| Ship lessors | — | — | — |
| Crude tankers | — | — | — |
| Product tankers | — | — | — |
| Tankers | — | — | — |
| Utilities | — | — | — |
| Gold | — | — | — |
No figure (—) for Container lines, Ship lessors, Crude tankers, Product tankers, Tankers, Utilities, Gold: we give these sectors no number in this crisis. That is not the same as saying they do not move.
The Red Sea reroute happened, but listed shares did not price it, so these are reasoned sensitivities to world growth — a map, not a forecast. Shipping shares carry no figure.
How sure are we?
Less sure. The detour really happened, but share prices barely reacted, so there was nothing to measure. Our numbers are careful estimates tied to a slower world economy, and we give shipping companies themselves no figure.
What to watch next
- Container traffic through Bab el-Mandeb: an announced return is not a return. The structure changes when ships come back in the PortWatch counts.
- The Saudi blockade: lifted, or a tanker bound for Yanbu attacked. Either one re-sets the central case.
- A new cost estimate from the IMF, OECD, ECB, Allianz or the World Bank would replace cited figures and may size what is now left out.
Your own holdings
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The other crises we model
- Strait of Hormuz / Iran Conflict EMPIRICAL
- Taiwan Strait / Semiconductor Chokepoint UNPRICED
- Panama Canal drought UNPRICED
- Korean Peninsula conflict UNPRICED
- US tariff shock EMPIRICAL · one real event, replayed
- Russia–Ukraine war EMPIRICAL · one real event, replayed
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DELAX describes exposure. It is not investment advice.