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Swiss-based MSC Mediterranean Shipping Co, the world's largest container shipping company, will stop using the Suez Canal after an attack on one of its ships, it said in a statement Saturday.
Yemen's Iranian-backed Houthi movement has in recent weeks been attacking vessels in the Red Sea - a crucial route allowing East-West trade, especially oil, to use the Suez Canal to avoid the extra time and expense of circumnavigating Africa.
The Liberian-flagged MSC Palatium III was attacked on Friday with a drone in the Bab al-Mandab Strait at the southern end of the Red Sea, according to the Houthis.
No injuries were reported, but the vessel suffered some fire damage and was taken out of service, MSC said. Another Liberian-flagged vessel, the Al Jasrah, was hit by a missile, which also started a fire, the U.S. military said.
The Houthis have in recent weeks stepped up attacks on shipping and fired drones and missiles towards Israel - on Saturday hitting the Red Sea resort city of Eilat - in support of the Iranian-backed Palestinian Islamist Hamas group fighting Israel in Gaza.
The Houthis, who rule much of Yemen, have pledged to continue their attacks until Israel stops its offensive but said on Friday they were targeting only ships heading to Israeli ports.
However, both the Palatium III and another MSC ship that was threatened, the Alanya, listed Jeddah in Saudi Arabia as their destination, based on data from the ship tracking and maritime analytics provider MarineTraffic.
Bab al-Mandab is one of the world's most important routes for global seaborne commodity shipments, particularly crude oil and fuel from the Gulf bound westward for the Mediterranean via the Suez Canal or the nearby SUMED pipeline, as well as commodities heading eastward for Asia, including Russian oil.
Britain said on Saturday that one of its warships had shot down a suspected attack drone targeting merchant shipping in the Area.
In response to the increase in attacks, Denmark's A.P. Moller-Maersk on Friday paused all its container shipments through Bab al-Mandab until further notice, and the German container line Hapag Lloyd said it might do the same, hours after reporting that one of its ships, the Al Jasrah, had been attacked near Yemen.
MSC said it would reroute some services around the Cape of Good Hope on Africa's southern tip, adding days to the sailing times of vessels booked to transit the Suez Canal.