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Egyptian President Abdel Fattah al-Sisi has stated that the Suez Canal is facing monthly revenue losses of about USD 800 million due to regional instability. This decline is mainly due to attacks on ships in the Red Sea by Yemen’s Iran-backed Houthi militants, which began in November 2023.
The Houthis launched these attacks in support of Palestinians during the Gaza conflict, causing significant disruptions to global shipping. As a result, many vessels have chosen to avoid the Suez Canal, opting to reroute around Africa, which has increased shipping costs. In December 2024, President Sisi noted that these disruptions had led to an estimated USD 7 billion drop in Suez Canal revenues for that year.
Recently, the Houthis have threatened to renew attacks on U.S. vessels in the Red Sea in response to U.S. military actions in Yemen, and they have also warned about targeting Israeli ships unless aid blockades to Gaza are lifted. These developments have forced shipping companies to reevaluate their routes, often selecting longer alternatives for safety. This change not only impacts global trade but also places economic pressure on Egypt, given the Suez Canal’s crucial role in international maritime trade.
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In light of these challenges, the Suez Canal Authority has launched initiatives to enhance the canal’s capacity and resilience. In December 2024, a trial run for a new 10 km channel extension at the southern end of the canal was completed. This expansion is intended to increase the canal’s capacity by accommodating an additional six to eight ships per day and to improve its capability to handle emergencies. Despite these initiatives, ongoing regional tensions highlight the need for comprehensive strategies to protect essential maritime routes and ensure the stability of global trade networks.
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