Israel's Eilat port to shut down over unpaid debts triggered by Houthi attacks

Israel's Eilat port will halt operations from Sunday after failing to pay its debts following a steep drop in revenue caused by Houthi attacks in the Red Sea.

The Israeli business and economics newspaper The Calcalist reported on Thursday that the Eilat municipality had frozen the port's bank accounts, amounting to approximately 10 million shekels ($3m), due to unpaid taxes. 

The newspaper reported that the port had recorded a steep drop in revenue due to the Yemeni group's attacks on ships linked to Israel.

Israel's Shipping and Ports Authority said on Wednesday that due to the "financial crisis it has entered due to the ongoing conflict, the Eilat Municipality informed the port's management of the seizure of all its bank accounts due to debts owed to the municipality.

"As a result, a notice was received from the Shipping and Ports Authority indicating that Eilat Port is expected to shut down and cease all activity starting this coming Sunday," it added.

Eilat port's 2024 income plunged to just 42 million shekels ($12.5m), down nearly 80 percent from 212 million shekels ($63m) in 2023, after shipping was diverted to the Mediterranean ports of Ashdod and Haifa.

Sources at the port told The Calcalist that the closure would "symbolise a victory for the Houthis and a loss for the Israeli economy".

Yemen's Houthis, also known as Ansar Allah, began attacking Israel and shipping vessels destined for Israel in the Red Sea region to protest against Israel's war on Gaza.

Israel has killed at least 58,000 Palestinians and wounded more than 140,000, most of them women and children.

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According to the international charity Save the Children, as many as 21,000 children are estimated to be missing.

Oded Forer, an Israeli MP from the right-wing Yisrael Beiteinu party, told Middle East Eye that the port's closure was "a badge of shame for the government of Israel".

According to Forer, who heads the Knesset Committee for the Strengthening and Development of the Negev and Galilee, the government had "not been able to remove the threat to the shipping routes to Eilat, so that in practice the southern trade gateway of the State of Israel is suffocated".

"For months, we warned of the collapse of the port of Eilat due to the failure to deal with the Houthi threats," Forer said.

'"Instead of acting resolutely to keep shipping lanes open, to implement a policy of support, the government allowed the port to collapse quietly.

"Every day that passes is additional damage to the periphery, the economy and sovereignty."

The primary trade that generated profits for the port before the war was the unloading of new cars arriving in Israel. 

In 2023, around 150,000 cars were unloaded at the port, and 134 ships docked. In 2024, no cars were unloaded, and the number of ships docking there dropped to 64, according to data from the Israeli Ministry of Transportation.

As of May 2025, only six ships docked at the port during the entire year.

'They threw us to the dogs'

Last month, the government approved a 15 million shekels ($4.5m) grant for the port to cover the debts accumulated since the beginning of the war, as the port was defined as a "strategic national asset".

But sources at the port told The Calcalist that the Israeli government had not provided them with sufficient support. 

According to port officials, the state expected a private company to "survive on its own for a year and eight months".

"They threw us to the dogs. It's terrible, it's a victory for the Houthis in the war against Eilat and Israel's economy," a port source told The Calcalist.

As a result of the financial losses, port officials said they had been forced to lay off scores of workers.

"We had 113 workers; today, there are 47 left," the head of the port workers' union said last month. "There are workers without wages and without unemployment benefits," he added.