Suez Canal revenues plunge as Red Sea tensions escalate
Revenues from transit through the Suez Canal have decreased by over 60 percent due to a drop in the number of ships, particularly those from the West. The Central Bank of Egypt attributes this to tensions in the Red Sea. The situation in the region is currently escalating.
The Central Bank of Egypt reported a significant decrease in revenues from transit through the Suez Canal. In the first half of the 2024/2025 fiscal year, revenues amounted to approximately $1.8 billion (2.5 billion CAD), marking a decrease of 62.3 percent compared to $4.8 billion (6.63 billion CAD) during the same period the previous year.
The primary reason for this decline is a 52.2 percent reduction in the number of ships passing through the canal. This is largely due to tensions in the Red Sea, where Yemeni Houthi fighters, supported by Iran, are attacking Western ships. Additionally, air force bombings of their positions by the United States and Israel contribute to the regional insecurity.
The Houthis are attacking to demand an end to the war in the Gaza Strip, where Israel has launched a new offensive.
Each day, between 50 and 60 ships pass through the Suez Canal, carrying cargo valued between $3 billion (4.1 billion CAD) and $9 billion (12.4 billion CAD). According to the World Bank, the canal accounts for about 15 percent of global trade, highlighting its strategic importance.
Due to the threats, many shipping companies are opting for the longer route around Africa, which is reducing traffic through the Suez Canal. This canal, which connects the Red Sea with the Mediterranean Sea, is one of the key routes for global trade.
Tensions rise in the Middle East
Meanwhile, the Israeli air force conducted a strike on Monday evening at Houthi rebel targets in Yemen. The targeted sites included the port in Hudaydah and a concrete factory in Bajil. Around 20 fighter jets participated in the operation, and 21 people were injured in the attack.
The strike was in response to Sunday's Houthi attack on Ben Gurion Airport in Tel Aviv. It was the first incident where a ballistic missile from the Yemeni group hit Israel's largest international airport. Fortunately, the missile did not cause serious damage.
Nasrudin Amer, a Houthi spokesperson, announced on social media that "Zionist-American attacks on civilian targets" would not deter them from fighting against Israel. The group plans to intensify attacks on Israel and the shipping routes through the Gulf of Aden and the Red Sea.
The Houthis, viewed by the West as a terrorist organization, are part of the so-called axis of resistance, supported by Iran. This network also includes the Palestinian Hamas and Lebanese Hezbollah. Since the outbreak of the Gaza Strip war in October 2023, the Houthis have conducted over 100 attacks on merchant ships off the coast of Yemen.
