Suez Canal revenue has declined by 60% this year, resulting in a $7 billion loss for Egypt, due to attacks on shipping in the Red Sea and ongoing regional tensions. President Abdel Fattah al-Sisi attributed this decline to increasing geopolitical challenges but provided no further details, as reported.
Egypt earns revenue from tolls on vessels that pass through the canal, which is a crucial route for maritime trade. In 2023, these tolls amounted to $9.4 billion, representing 15% of the foreign currency entering the country.
Meanwhile, the Suez Canal Authority reported success in a dredging project aimed at testing two-way vessel transit. Currently, only select sections of the canal allow for two-way traffic through a parallel waterway opened in 2015. Expanding two-way traffic could increase the canal’s vessel capacity and help avoid disruptions like the 2021 incident involving the container ship Ever Given, which blocked traffic for six days.
Since late 2023, Houthi fighters in Yemen have impacted global trade by attacking both merchant and naval vessels in the Red Sea, just south of the canal. As a result, most major container ship operators have rerouted their ships on longer, costlier journeys around the Horn of Africa for connections between Asia, the United States, the Middle East, and the Mediterranean. These diversions have driven up shipping costs and significantly increased carriers’ profits.
According to Alphaliner, it has been 40 weeks since an ultra-large container ship (ULCS) capable of carrying 18,000 or more twenty-foot equivalent units (TEU) has transited the canal. A multinational force of American and European military personnel has been patrolling the area to provide escorts for merchant vessels.
The Iran-backed Houthis have claimed that their missile and drone attacks are in support of Palestinians amid the Israel-Hamas conflict. However, these attacks have recently decreased as Iran faces its own internal challenges, and the Houthis have shifted their focus to targeting Israel. Additionally, the fall of the Assad regime in Syria and the withdrawal of Russian forces from Syrian ports have added to the uncertainties in the Middle East.
Some experts anticipate a return of shipping services in the Red Sea as security conditions improve, though this is not expected to happen before the second half of 2025.
