Once seen as a cornerstone of Saudi Arabia’s effort to become a Red Sea transshipment hub, King Abdullah Port now faces a severe drop in traffic—down from 188 ship calls in 2023 to just 59 in 2024. The port, co-owned by a company linked to Emaar and Huta Marine Works, was intended to serve both regional logistics and the King Abdullah Economic City. However, Houthi attacks have rendered the Red Sea corridor unsafe for most global carriers, especially those shipping goods from Asia.

Executives from two regional ports told Middle East Eye that business at the facility has collapsed to such a degree that it could not be sold even if put on the market. By contrast, the Jeddah Islamic Port, a primary gateway for imports into western Saudi Arabia, saw a more modest decline of 14%.

Gulf Shipping Diverted As Neom Plans Shrink

The broader security shift is altering shipping routes, with vessels increasingly calling at King Abdul Aziz Port in Dammam on the Eastern coast. Even major Chinese exporters, such as BYD, now prefer Dammam over Red Sea ports for deliveries.

This maritime reshuffle poses deep challenges to Saudi Arabia’s Vision 2030 strategy, which emphasizes Red Sea infrastructure as central to economic diversification. “The Red Sea is the most important dimension of the plan for developing untapped potential,” said Robert Mogielnicki of the Arab Gulf States Institute.

The port-building spree shared by Saudi Arabia, Egypt, and the UAE is facing pressure not just from Houthi threats, but also from global overcapacity, low investor interest in megaprojects like Neom, and falling oil revenues.

Regional and Diplomatic Repercussions

The Houthis originally halted their attacks during a ceasefire in Gaza earlier this year, but resumed operations following Israel’s withdrawal from the truce. Two Greek-owned vessels were reportedly sunk in recent months, and vessel insurers remain wary of the Red Sea.

A diplomatic source told Middle East Eye that Egypt, also hard hit due to losses in Suez Canal revenues, conveyed to Washington that only a ceasefire in Gaza would stop Houthi attacks. Meanwhile, Saudi Arabia reportedly urged former U.S. President Donald Trump to halt airstrikes on Yemen ahead of his Gulf visit in May.