Between two chokepoints: Egypt's growing Red Sea dilemma

Seven months into the US-Israel war on Iran, Egypt finds itself increasingly exposed to the pressures of a wider regional conflagration.

The Houthis’ recent offensive to consolidate control over Bab al-Mandeb poses serious risks for Cairo, which has already experienced the economic fallout of Houthi attacks on maritime traffic.

In late 2023, when the Houthis targeted commercial shipping in response to Israel’s war on Gaza, the campaign sharply curtailed traffic through the Red Sea and the Suez Canal.

According to the International Monetary Fund (IMF), the turmoil reduced Egypt’s Suez Canal revenues by over $6 billion in 2024.

Traffic through the canal has since recovered, with transits exceeding 1,200 in both July and August. August also marked the busiest month since December 2023.

Prolonged disruption could, however, once again constrain one of Egypt’s key sources of foreign currency. A deterioration in Red Sea security would also carry wider economic, political, and security consequences for the broader region.

Houthis seek to maximise Red Sea gains

The Houthis’ expanding offensive along Yemen’s Red Sea coast, including their capture of strategically important territory around Mocha and the islands of Mayun (Perim) and Hanish, is aimed at cementing their position around Bab al-Mandeb.

“They know that holding the coast for long may be difficult, which is why they are trying to entrench themselves by securing the highlands overlooking Bab al-Mandeb and cutting the strategic lines connecting Aden and Taiz, which would obstruct the ability to send reinforcements to Mokha,” Yasmeen El Eryani, Executive Director for Knowledge Production at the Sana’a Center for Strategic Studies, told The New Arab.

This strategy also reinforces a broader trend in contemporary conflict: the weaponisation of economic interdependence. Recent months have demonstrated the extent of the global economy’s dependence on a limited number of strategic infrastructure networks and maritime chokepoints.

This asymmetry has created opportunities for conventionally weaker actors to generate outsized political gains. Iran’s use of the Strait of Hormuz underscored the strategic leverage that can be derived from weaponising maritime chokepoints.

That logic is particularly relevant to the Red Sea, where the Houthis are closely watching developments around the Strait of Hormuz with a growing awareness that they do not need uncontested control of the entire maritime corridor to impose real costs on global shipping and energy markets. The ability to generate sufficient uncertainty can itself become a major strategic tool.

“The Houthis don’t yet want to strangle all shipping, rather, they seek to leave open the possibility that things could go in that direction if certain demands aren’t met. For now, it serves them better if the threat remains veiled,” Alia Brahimi, Non-resident Senior Fellow at the Atlantic Council, told The New Arab.

Prospects of prolonged disruption weigh heavily on Cairo’s strategic calculations. Consistent with its cautious posture since the US-Israel war on Iran began, Egypt has approached the latest escalation with strategic restraint.

In response to the latest round of Houthi attacks, Cairo established a specialised crisis cell to monitor developments and doubled down on regional diplomacy. Saudi Crown Prince Mohammed bin Salman’s visit to Cairo in mid-September reflected continued close bilateral coordination.

Multilaterally, the regional quartet (R4), comprising Egypt, Saudi Arabia, Turkey, and Pakistan, remains active, convening for the sixth time on the sidelines of the 81st UN General Assembly.

Egyptian Foreign Minister Badr Abdelatty also met with his Omani counterpart, stressing Egypt’s solidarity with Saudi Arabia and affirming Cairo’s commitment to supporting regional de-escalation.

“Egypt has much to lose from further escalation of regional hostilities, particularly in the Red Sea. This suggests Cairo will likely continue pursuing an intermediary role alongside other regional actors with similar interests, including Oman, Pakistan, Turkey, and Qatar,” Giorgio Cafiero, CEO of Gulf State Analytics, told The New Arab.

The Houthis’ growing confidence, however, cannot be separated from Iran’s broader regional strategy. With Hamas and Hezbollah’s capabilities severely degraded, the Houthis have become a vital lever for Tehran to exert pressure and project power across the region.

Interconnected regional conflict theatres

The Houthis’ increasingly assertive approach to Bab al-Mandeb comes at a strategically significant moment, ahead of the US midterm elections.

With peace negotiations stalled and fears of renewed hostilities mounting, “the Houthis gave themselves a tight timeline to conduct the Bab al-Mandeb operation because, for it to yield optimal results for the Houthis and Iran, it needed to happen ahead of the US midterms, so that it could be used as leverage in Iran-US negotiations,” El Eryani told The New Arab.

These developments illustrate how multiple theatres can be exploited simultaneously, through allied groups, with far-reaching economic and security repercussions.

Previously relatively shielded from the direct effects of the Iran war, Egypt now faces growing challenges from escalating tensions in the Red Sea. Cairo has thus far avoided isolating or antagonising any regional players.

This caution is reinforced by the legacy of Egypt’s 1960s intervention in Yemen, which cost the lives of more than 10,000 Egyptian soldiers and shaped a longstanding preference for diplomatic engagement and close coordination with regional partners over direct military intervention.

Egypt is likely to remain aligned with regional partners, providing political and potentially targeted military support, as it did through naval participation in the 2015 Operation Decisive Storm and through its membership in the Saudi-led Multinational Maritime Defence Alliance, established earlier this year to strengthen maritime security and protect international shipping and energy routes in the Red Sea, Bab al-Mandeb, and Gulf of Aden.

“But the pressure to act is being applied from many directions, and the real risk is that Egypt accidentally becomes entrapped by the escalatory logic of the conflict more generally,” said Brahimi.

The limits of regional alliances

The Houthis’ attacks on Saudi Arabia marked the first real test of the Mecca Joint Defence Agreement, struck last month between Saudi Arabia, Turkey, and Pakistan. The test revealed the enduring challenges of activating joint regional defence frameworks.

While signatories mobilised rhetorically in response to Houthi attacks on Saudi Arabia, whether that translates into a coordinated joint response remains to be seen.

Egypt remains outside the framework, but this challenging landscape will likely further complicate Cairo’s prospective role in joint defence frameworks, particularly Article 5-style agreements that create commitments to direct intervention.

Any decision to intervene would require caution. Cairo is navigating the Red Sea on two simultaneous fronts, as an economic lifeline and a strategic theatre in which competing regional interests intersect. This creates significant constraints on the scope of direct Egyptian involvement.

These dynamics leave Egypt with a narrow set of options. Further escalation in the Red Sea would expose the Egyptian economy to direct economic and security risks, but the costs of direct intervention remain high.

Cairo is therefore likely to continue relying on its diplomatic channels, intelligence-sharing networks, and naval capabilities while closely monitoring developments.

Ultimately, Egypt’s strategy will be shaped by how far the Houthis and the wider Iran war expand, and how directly the conflict spills over into Egypt’s strategic interests.

Hana Elshehaby is a Senior Research Assistant for the Middle East Council on Global Affairs. She is also a Non-Resident Fellow at the Institute for Middle East Options

Follow her on X: @hanaelshehaby_

Edited by Charlie Hoyle