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Houthi Attacks Cuts Suez Canal Revenue by 40-50%

Houthi Attacks Cuts Suez Canal Revenue by 40-50%.

Egyptian President Abdel Fattah al-Sisi disclosed on Monday that Suez Canal revenues have plummeted by 40 to 50 percent this year due to attacks on shipping by Yemen’s Houthi rebels.

Read More: Yemen’s Houthis Claims Attack on UK-owned Ship

This vital waterway serves as a significant source of foreign currency for Egypt, crucial in light of the nation’s profound financial challenges.

Since November, Houthi insurgents, backed by Iran, have launched multiple assaults on vessels in the Gulf of Aden and Red Sea. They claim these actions are in solidarity with Palestinians in Gaza, targeting ships with perceived ties to Israel.

Consequently, major shipping companies have rerouted their vessels, bypassing the Red Sea and traversing around Africa, disrupting the usual flow of around 12 percent of global trade.

President Sisi underscored these disruptions during a conference with oil companies, highlighting the considerable impact on Egypt’s economy.

The United Nations reported a sharp decline in ship traffic through the Suez Canal, with container ship transits plummeting by 67 percent year-on-year.

This downturn in canal activity poses significant economic challenges for Egypt, as the canal typically generates billions in revenue annually.

In the face of dwindling foreign currency reserves, exacerbated by ongoing struggles in sourcing dollars, the canal’s financial contribution remains vital alongside other revenue streams such as tourism and remittances.

The Suez Canal, a historic engineering marvel dating back to 1869, has long been a lifeline for Egypt’s economy.

Its recent decline in revenue underscores the urgent need for solutions to mitigate disruptions and ensure the canal’s continued economic significance for Egypt and global trade.

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