Introduction
The Port of Assab, situated along Eritrea’s Red Sea coast, has emerged as a focal point of Saudi Arabia’s economic and geopolitical strategy in the Horn of Africa.
Article analyzes Saudi Arabia’s investment prospects in Assab against the backdrop of escalating tensions driven by Ethiopian Prime Minister Abiy Ahmed’s renewed claims over Red Sea access.
Saudi Arabia’s historical role as a mediator, combined with its Vision 2030 economic diversification goals, positions it as a critical nation in stabilizing the region through infrastructure development and diplomatic engagement.
However, Abiy’s rhetoric on securing a seaport—potentially through military means—threatens to destabilize the fragile peace established by the 2018 Jeddah Peace Pact.
The following sections explore the strategic, economic, and security dimensions of Saudi-Eritrean cooperation, Ethiopia’s destabilizing ambitions, and the challenges to regional stability.
Historical Context of Saudi-Eritrea Relations
Saudi Arabia’s Mediation in the Eritrea-Ethiopia Conflict
Saudi Arabia’s involvement in the Horn of Africa intensified following the 2018 Jeddah Peace Pact, which normalized relations between Eritrea and Ethiopia after decades of hostility.
The agreement, brokered with support from the UAE and the African Union, marked a turning point in regional diplomacy.
By leveraging its geographic proximity and economic influence, Saudi Arabia positioned itself as a key mediator, offering Ethiopia a $140 million loan in 2019 to develop infrastructure critical to bilateral trade. This initiative aimed to consolidate peace by addressing Ethiopia’s landlocked status through access to Eritrean ports, including Assab.
Economic Incentives and Red Sea Partnerships
Saudi investments in the Horn of Africa surged to $13 billion between 2000 and 2017, driven by food security needs and post-oil economic diversification under Vision 2030.
The Kingdom’s focus on port development, such as the modernization of Jeddah Islamic Port and Dammam’s King Abdulaziz Port, reflects its broader strategy to enhance Red Sea trade routes.
For Eritrea, Assab’s deep-water harbor and proximity to the Bab el-Mandeb Strait—a chokepoint for 10% of global maritime trade—make it a strategic asset for Saudi-led initiatives.
Joint economic zones and Saudi-funded road projects sought to integrate Eritrea into regional supply chains, though border closures in 2018 delayed these plans.
The Strategic Value of Assab Port
Infrastructure and Trade Potential
Assab’s infrastructure includes deep-water berths, cargo handling equipment, and storage facilities capable of servicing large commercial and military vessels.
Prior to Eritrea’s independence in 1993, the port handled 90% of Ethiopia’s trade, but its capacity dwindled during the border war.
Saudi Arabia’s interest in rehabilitating Assab aligns with its goal to establish a network of Red Sea ports, reducing reliance on Djibouti, which currently handles 95% of Ethiopia’s imports.
The World Bank’s 2025 Ports Rehabilitation Project highlights Assab’s potential to become a transshipment hub if modernized, with projections to increase annual throughput from 2.8 million tons to 5 million tons.
Geopolitical Significance
Control over Assab would grant Saudi Arabia leverage in a region where rivals like the UAE and Turkey are expanding influence through ports in Berbera (Somaliland) and Djibouti.
The port’s proximity to Yemen also positions it as a logistical node for Saudi-led military operations, though Eritrea’s 2024 closure of the Qatar-mediated Djibouti border underscores lingering regional disputes.
For Eritrea, Saudi investments offer a lifeline amid international isolation, with bilateral trade reaching $3.7 million in 2023, primarily in construction materials.
Saudi Arabia’s Economic Initiatives in the Horn
Vision 2030 and Cross-Red Sea Investments
Saudi Arabia’s National Transformation Plan prioritizes technical and financial partnerships with Horn nations to address food insecurity and unemployment.
In 2021, the Saudi Ports Authority (Mawani) invited private investors to develop multipurpose terminals under build-operate-transfer (BOT) models, including at Jizan and Yanbu—a framework potentially replicable in Assab.
These projects aim to diversify Saudi logistics capabilities while integrating Eritrea and Ethiopia into GCC supply chains. For instance, the proposed Saudi Logistics City in Djibouti mirrors efforts to position Assab as a gateway for African markets.
Challenges to Economic Integration
Despite Saudi financing, Eritrea’s centralized economy and Ethiopia’s debt crisis ($28 billion as of 2024) hinder progress. The 2018 closure of Eritrea’s border with Ethiopia over market dominance fears disrupted joint economic zones, delaying the Jeddah Pact’s trade objectives.
Additionally, Saudi-Eritrean trade remains modest compared to the UAE’s $5 billion investments in Ethiopian agriculture and manufacturing.
Regional Security Concerns and Ethiopia’s Ambitions
Abiy Ahmed’s Port Demands and Domestic Pressures
Prime Minister Abiy Ahmed’s October 2023 declaration that Ethiopia “will fight” for Red Sea access reflects mounting domestic crises.
With military defeats in Amhara and Oromia, Abiy has shifted focus to nationalist rhetoric, invoking historical claims over Assab and Massawa.
Ethiopia’s reliance on Djibouti costs $1 billion annually in port fees, exacerbating its foreign currency shortage.
While Abiy denies plans for invasion, his mobilization of 500,000 troops near the Eritrean border and arms imports from Turkey and Iran signal preparedness for conflict.
Eritrea’s Defensive Posture
Eritrea, bolstered by Saudi and Emirati security guarantees, has fortified Assab’s military infrastructure, including air defense systems. President Isaias Afwerki’s March 2025 message to Crown Prince Mohammed bin Salman reaffirmed bilateral ties, suggesting Saudi backing for Eritrea’s territorial integrity.
However, Eritrea’s 2024 expulsion of UAE-linked firms from Massawa underscores tensions over competing Gulf investments.
Saudi Arabia’s Diplomatic Balancing Act
Mediation and Conflict Prevention
Saudi Arabia’s 2018–2020 peace initiatives included hosting talks between Djibouti and Eritrea, though these collapsed over the disputed Doumeira Islands.
The Kingdom’s current strategy emphasizes economic incentives to deter Ethiopian aggression, such as offering Ethiopia stakes in Assab’s development in exchange for renouncing territorial claims.
However, Abiy’s refusal to participate in Igad summits complicates dialogue.
Regional Alliances and Counterterrorism
Collaboration with the UAE and Egypt on Red Sea security initiatives aims to counter Houthi threats and Somali piracy, with Assab serving as a surveillance hub.
Saudi Arabia’s $12.7 billion refinery project in Djibouti, launched in July 2024, complements these efforts while hedging against instability in Eritrea.
Challenges to Saudi Investments
Infrastructure and Governance Risks
Assab’s outdated equipment and limited connectivity to Eritrea’s road network necessitate $200 million in upgrades, per World Bank estimates.
Bureaucratic hurdles in Eritrea’s state-controlled economy further deter private investors, despite Mawani’s BOT proposals.
Geopolitical Rivalries
The UAE’s dominance in Djibouti and Somaliland challenges Saudi influence, while Turkey’s military base in Somalia threatens to fragment regional alliances.
Ethiopia’s warming ties with Iran, a Saudi rival, adds complexity, particularly following Tehran’s 2024 drone shipments to Addis Ababa.
Conclusion and Recommendations
Saudi Arabia’s investment in Assab represents a strategic bet on Red Sea trade diversification amid Abiy Ahmed’s destabilizing port claims.
While the Kingdom’s economic and diplomatic tools have thus far averted war, Ethiopia’s desperation for sea access and Eritrea’s militarization demand proactive measures. Recommendations include
Expanding Multilateral Engagement
Strengthening Igad’s role to mediate Ethiopia-Eritrea disputes, backed by AU and UN support.
Accelerating Port Modernization
Partnering with the World Bank to fast-track Assab’s rehabilitation, prioritizing container handling and road links to Ethiopia.
Economic Incentives for Ethiopia
Offering Addis Ababa equity in Assab’s operations or discounted tariffs to reduce dependency on Djibouti.
The coming months will test Saudi Arabia’s ability to balance regional ambitions with conflict prevention, ensuring that Assab’s potential is realized without reigniting war.
