Saudi Red Sea push gives Neom port a practical trade function

The Kingdom is repurposing the Port of Neom into a trade hub, linking the Gulf with Europe and Africa to reduce reliance on the Strait of Hormuz after Iranian disruptions, according to the Financial Times. The port is reportedly fully operational, with a 1.5 mn TEU capacity, and is handling rising cargo flows to help reroute trade away from the strait, part of a gradual westward shift in the economic center, supported by growing investment in ports and logistics along the Red Sea.

Despite the wider Neom gigaproject being scaled back, its infrastructure is being used, with Sage Institute for Foreign Affairs’ Elana DeLozier noting that Neom “was probably not originally about hedging against threats to the Hormuz, but that could theoretically become more of a focus.”

Limited infrastructure, however, continues to weigh on the shift, including the lack of a direct Red Sea rail link, capacity constraints at Yanbu Port, and delays to the Riyadh-Jeddah landbridge rail project (now expected by 2034), according to the salmon-colored paper.