Egypt's Suez Canal revenue declines by almost half due to Red Sea tensions

The revenue of Egypt's Suez Canal has declined by almost half this year following recurrent attacks on international shipping crossing the Red Sea recently launched by the Houthis in Yemen in protest of Israel's war on Gaza. 

Egyptian President Abdel-Fattah El-Sisi said on Monday, 19 February, during the inauguration of the seventh edition of Egypt Energy Show (EGYPES 2024) in Cairo that revenue derived from the Suez Canal has dropped by about 40 to 50 per cent.

Houthis have been attacking vessels in the region to protest against the ongoing Israeli war on the Gaza Strip, prompting leading shipping firms to avoid the Egyptian waterway and find alternative routes.

The Suez Canal Authority Chief Osama Rabie said in media statements last week that the canal's income decreased to US$428 million in January compared to US$804 million in the same period in the previous year.

According to Rabie, the traffic of ships in the waterway witnessed a 30-percent decline compared to the same period of 2023.

During the fiscal year 2022/2023, the returns from the Suez Canal hit a record-breaking US$9.4 billion.

In his improvised speech, Sisi attributed other factors leading to the economic crisis in Egypt — the COVID-19 pandemic, the Russia-Ukraine war, the civil war in neighbouring Sudan and the Israeli ongoing onslaught on Gaza bordering Egypt.

The Houthis, who rule much of Yemen, have pledged to continue their attacks until Israel halts its offensive against Gaza.

As a result, the US and the UK have recently been conducting airstrikes against Houthi targets, with the Houthis responding by targeting US and British ships.

The Suez Canal is a significant source of Egypt's national income, supplying the country with hard currency amid a dire shortage. Other primary sources of hard currency are tourism and the remittances transferred by Egyptians working abroad.