Egypt’s Suez Canal Authority announced a significant decline in revenue on Thursday, attributing it to disruptions in Red Sea shipping caused by attacks from Yemen’s Huthi rebels.
The key waterway, a vital source of foreign currency for Egypt, saw a 23.4% drop in revenue for the financial year 2023/24.
Since November 2023, the Huthi rebels have launched multiple attacks on vessels in the Red Sea and Gulf of Aden, targeting ships linked to Israel.
These attacks, aimed at showing solidarity with Palestinians in Gaza, have spooked major shipping companies.
Many have opted to reroute their vessels around Africa, adding thousands of miles and significant costs to their journeys.
The Suez Canal Authority reported a passage of 20,148 ships during the 2023/24 financial year, generating $7.2 billion in revenue.
This represents a substantial decrease compared to the previous year, which saw 25,911 ships navigate the canal and generate $9.4 billion.
“The severe impact of the Red Sea crisis on canal traffic” is the primary reason for the decline, according to Oussama Rabie, president of the Suez Canal Authority.
Security concerns, he explained, are encouraging ship owners to seek alternative routes, leading to “increased travel times and costs.”
The financial strain caused by the Suez Canal revenue drop comes at a challenging time for Egypt, which is currently battling a severe financial crisis.
The government relies heavily on the canal as a source of foreign currency, and this decline could further exacerbate the economic situation.
