Houthi Attacks on Suez Canal Plunge Egypt's Revenue by 60%

The Suez Canal, a vital artery for global trade, is facing a severe crisis as a result of ongoing attacks by Yemen's Houthi rebels. Since late 2023, the Houthis have executed approximately 250 strikes on maritime vessels transiting through the canal, severely disrupting shipping traffic. This has stemmed from their efforts to influence international stance on the Gaza conflict.

The impacts of these disruptions are significant. Traffic through the canal dropped sharply from an average of 72 ships daily, carrying 4.4 million tonnes of cargo in mid-December 2023, to just 27 vessels by the end of that month. Consequently, many ships have opted to reroute around Africa, further exacerbating Egypt's financial strain.

According to Egyptian officials, including Foreign Minister Badr Abdelatty, revenue from the Suez Canal has plummeted by around 60%, with the state losing an estimated $7 billion in 2024 alone. More than 6,500 vessels have since altered their routes in response to the ongoing situation.

The Suez Canal has faced challenges throughout its 150-year history, including the infamous blockage by the mega-ship Ever Given in 2021. Current disruptions coincide with Egypt's dire economic outlook, marked by a current account deficit exceeding $20 billion.

Despite these challenges, Egyptian authorities remain optimistic, insisting that the canal's strategic position remains unparalleled and that expansion plans are underway. They are evaluating another upgrade to the canal, originally completed in 2021, to increase capacity and efficiency once the current issues are resolved.