Suez Canal revenue has plunged 60% this year, a loss of $7 billion for Egypt, amid attacks on shipping in the Red Sea and ongoing regional tensions.
President Abdel Fattah al-Sisi in a statement blamed rising geopolitical challenges for the decline but offered no other details, according to published reports.
Egypt collects tolls on vessels that transit the canal, a key route for maritime commerce. That amounted to $9.4 billion in 2023, or 15% of the foreign currency entering the country.
At the same time, a dredging project to test two-way vessel transit was termed a success, the Suez Canal Authority said in a statement Saturday. Currently only some sections of the canal accommodate two-way transits via a parallel waterway opened in 2015. Two-way traffic could eventually increase the waterway’s vessel capacity, and avoid catastrophic shutdowns such as the 2021 grounding of the container ship Ever Given which blocked canal traffic for six days.
Since late 2023, Houthi fighters based in Yemen have disrupted global trade by attacking merchant and naval vessels in the Red Sea, just south of the canal. Most major container ship operators have diverted ships away from the region and on longer, more expensive voyages around the Horn of Africa, for services connecting Asia with the United States, Mideast and Mediterranean. The diversions have pushed up shipping rates and boosted carriers’ profits by billions of dollars.
Through November, it had been 40 weeks since an ultra-large container ship (ULCS) of 18,000 or more twenty foot equivalent units (TEU) capacity had traversed the canal, according to Alphaliner.
A multinational force of American and European military has patrolled the area, providing escorts for merchant vessels.
The Iran-backed Houthis have said the missile and drone assaults are in solidarity with Palestinians in the Israel-Hamas war. But the attacks have recently tailed off as Iran grapples with its own internal issues, and the Houthis have increasingly targeted Israel itself. The fall of the Assad regime in Syria and withdrawal of Russia from ports there have added to the uncertainty surrounding events in the Middle East.
Some observers forecast a return of Red Sea shipping services as security improves, but likely not until the second half of 2025.
This article was updated Dec. 29 to add information on the Canal’s test of two-way vessel traffic.
Find more articles by Stuart Chirls here.
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