Houthi Attacks Disrupt Suez Canal, Severely Impacting Egypt's Economy

Egypt's Suez Canal, a vital artery for global trade, is facing a significant crisis due to ongoing attacks by Houthi rebels from Yemen. Since November 2023, approximately 250 assaults on ships navigating the canal have been reported, severely disrupting maritime traffic as the rebels aim to influence international pressure on Israel regarding its operations in Gaza.

Traffic through the canal has plummeted dramatically, falling from an average of 72 vessels per day in mid-December 2023 to just 27 ships by the month's end, carrying only a quarter of the usual cargo. This alarming decline has resulted in an estimated loss of $7 billion in revenue for Egypt in 2024, as confirmed by the country's Foreign Minister Badr Abdelatty.

The Suez Canal Authority Chairman, Osama Rabie, indicated that more than 6,500 ships have altered their routes in response to the recent security concerns. The Egyptian government is grappling with a current account deficit exceeding $20 billion, intensified by dwindling canal revenues and a large trade deficit.

Despite these challenges, Egyptian authorities remain optimistic about the canal's strategic importance and are considering further expansions to ensure its competitiveness once disruptions end. The Suez Canal has a long history of crises, but officials believe that no alternative route can match its efficiency and strategic location between Asia and Europe.