Suez Canal Revenues Plummet 50% Amid Houthi Attacks on Red Sea Shipping

Suez Canal revenues have dropped by a staggering 50% due to Houthi attacks on Israel-bound ships in the Red Sea, according to Egyptian Minister of Planning and Economic Development Hala El-Said. Speaking at the World Economic Forum in Riyadh, El-Said revealed the severe economic impact of the ongoing disruptions to maritime trade in the region.

The Houthi movement, an Iran-backed Islamist militant organization, has seized and launched aerial attacks against dozens of merchant and naval vessels in the Red Sea since 2023. The crisis is linked to the Israel-Hamas war, the Iran-Israel proxy conflict, and the Yemeni crisis. The Houthis have declared that they consider any Israel-linked ship as a target and will not stop until Israel ceases its war on Hamas.

In response to the attacks, hundreds of commercial vessels have been rerouted to sail around South Africa, significantly increasing costs and delays. The UN Security Council has adopted a resolution condemning the Houthi attacks and affirming freedom of navigation. The US and UK have led coalition missile strikes against the Houthis, while other countries are independently patrolling the waters near Yemen.

Why this matters: The Suez Canal is a crucial global trade route, and the 50% drop in revenues has major economic implications for Egypt and the broader region. The escalating tensions in the Red Sea threaten to further disrupt international shipping and drive up costs, potentially impacting global supply chains.

Egypt has been actively working to mitigate the impact of the shipping disruptions. The country is overseeing the implementation of 80 port projects, with a total investment of LE 129 billion, in collaboration with 100 private sector companies. These efforts aim to transform the Suez Canal into an advanced logistics hub and offset the losses incurred by reduced ship traffic.

The broader regional tensions have escalated amid a deadly Israeli offensive on the Gaza Strip, which has caused massive destruction and displacement. Israel stands accused of genocide at the International Court of Justice, with an interim ruling ordering it to stop genocidal acts and provide humanitarian assistance to civilians in Gaza. As El-Said noted, "The situation in the Red Sea and the wider region is extremely concerning. We call on all parties to cease hostilities and work towards a peaceful resolution to protect lives and ensure the free flow of global trade."

Key Takeaways

• Suez Canal revenues plummet 50% due to Houthi attacks on Israel-bound ships in Red Sea.
• Houthis target any Israel-linked ships, disrupting global trade and supply chains.
• UN condemns Houthi attacks, US and UK lead coalition strikes, countries patrol Red Sea.
• Egypt investing LE 129 billion in 80 port projects to transform Suez Canal into logistics hub.
• Wider regional tensions escalate amid Israel-Gaza conflict, accusations of genocide at ICJ.