Egyptian President reveals Suez Canal revenue plummets amid Yemeni Rebel attacks

Egypt’s President, Abdel Fattah al-Sisi, reports significant decline in Suez Canal earnings, attributed to attacks by Yemen’s Houthi rebels

President of Egypt Abdel Fattah al-Sisi revealed on Monday a sharp decline in Suez Canal earnings, attributing a 40–50% decline this year to disruptive assaults on ships by Yemen’s Houthi rebels. The battle that touches on deeper geopolitical concerns and Egypt’s protracted financial crisis has so far had an economic impact on the canal, which is an essential route for international commerce.

A vital link in the world’s commercial network, the Suez Canal normally handles 12% of all worldwide trade, including vital supplies of grain, gas, and oil. But since November, the Houthi militia, which receives assistance from Iran, has been attacking ships in the Red Sea and the Gulf of Aden to protect Palestinian interests from Israeli-affiliated commerce. Due to these attacks, a number of the world’s most prestigious shipping firms have had to reroute their ships around Africa, which adds thousands of kilometers and significant costs to each voyage.

When it was first opened in 1869, the Suez Canal was both a technical wonder and a representation of Egypt’s importance in world politics. However, the current difficulties highlight how susceptible international trade routes are to local conflicts and the profound effects of such interruptions on nations like Egypt, who much depend on the canal for economic stability. 

“See what is happening at our borders… with Gaza, you see the Suez Canal, which used to bring Egypt nearly $10 billion per year, these revenues have decreased by 40 to 50 percent and Egypt must continue to pay companies and partners,” President Sisi said, outlining the severe financial repercussions for Egypt during a conference with oil companies.

Egypt is already under severe economic pressure, fighting to retain its foreign exchange reserves against a background of growing import prices and financial instability. This dip in the canal comes at a bad moment for the country. Along with tourism and remittances, the Suez Canal’s profits, which previously reached around $8.6 billion in the fiscal year 2022–2023 constitute a crucial foreign currency inflow into a nation whose dollar shortages have become more severe.

In the previous two months, the United Nations recorded a 42 percent decrease in the total number of ship passes through the canal, with notable drops seen in all categories of commerce. Transits by container ships plunged by 67 percent year over year, tanker traffic dropped by 18 percent, and bulk cargo ships that transport necessities like coal and grain moved by 6 percent. The movement of gas via the canal has completely stopped.

Source: AFP