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

The Suez Canal, a critical trade route for global maritime traffic, is facing a severe slowdown due to escalating attacks by Yemen's Houthi rebels. Since November 2023, the Houthis have launched around 250 attacks on vessels in the canal, aiming to influence international actions regarding military operations in Gaza. The impact has been felt dramatically; daily ship crossings dropped from an average of 72 to just 27 by the end of December 2023, reducing cargo traffic from 4.4 million tonnes to approximately 1 million tonnes.

The situation has financial ramifications for Egypt, with officials confirming a drastic 60% decline in revenue from the canal, equating to an estimated loss of $7 billion in 2024. Over 6,500 ships have redirected their routes, opting to navigate around Africa instead. Egypt's Foreign Minister, Badr Abdelatty, stated that the nation's current account deficit has exceeded $20 billion, exacerbated by these reduced canal revenues.

Despite these challenges, Egyptian authorities remain optimistic, asserting that the canal’s strategic importance between Asia and Europe cannot be easily replaced. Plans for further expansions of the canal are in development, signifying an intent to boost operations once the current disruptions cease. The Suez Canal has a storied history of resilience, having faced multiple crises over its 150-year existence, including a significant blockade during the Six-Day War in 1967.