Israel’s Ports and Shipping Authority said Wednesday that Eilat Port will suspend all operations as of July 20 due to an escalating debt crisis that has paralyzed the strategic facility.

In an official memo, Israel’s National Emergency Authority said the shutdown was triggered after the Eilat Municipality froze the port’s bank accounts over unpaid local taxes, making it impossible to maintain operations.

Local media described the move as “a dramatic step” that could undermine Israel’s maritime logistics in the Red Sea.

The emergency authority warned that the closure could halt logistical support for the Israeli Navy in the region, raising concerns about potential security gaps at a time of heightened regional tensions.

In June, the Israeli government approved an emergency grant worth 15 million shekels ($4 million) to help cover the port’s debts, but this was reportedly insufficient to restore normal operations.

Local reports estimate that revenue for 2024 has dropped by nearly 80% amid a virtual standstill in vehicle imports and other cargo shipments since the outbreak of the Gaza war in October 2023.

On Tuesday, the Israeli army said it intercepted a drone launched from Yemen by the Houthi group targeting the port city of Eilat.

The Houthis claimed responsibility for a dual drone attack that they said struck the Eilat port and a military site in the Negev region, describing the attack as a “successful simultaneous operation.”

The incident highlights growing security risks in the Red Sea and southern Israel, adding pressure on an already struggling port that has faced severe revenue losses due to maritime threats and repeated disruptions in the shipping lanes.

The persistent threat resulting from the Israeli war on Gaza has pushed Eilat’s operations to the brink of bankruptcy and now to complete closure.

The Port of Eilat, Israel’s southernmost port on the Red Sea, has long served as a critical gateway for trade routes bypassing Egypt’s Suez Canal.

However, since November 2023, Yemen’s Houthis have intensified missile and drone strikes on Israel and have targeted commercial shipping in the Red Sea, Gulf of Aden, and Arabian Sea in support of Palestinians in Gaza, where nearly 58,600 people have been killed in Israel’s onslaught.