Houthi attacks cause Suez Canal revenues to plummet 40-50%

Attacks on shipping by Houthi rebels in Yemen have cut revenue from the Suez Canal by almost half this year, Egyptian President Abdel Fattah al-Sisi said Monday. The canal is a vitally important source of foreign currency for Egypt, which is suffering from a prolonged financial crisis. Houthi rebels, which are backed by Iran, have attacked shipping in the Red Sea and Gulf of Aden since November 2023. The rebels say they are acting in support of Palestinians in Gaza by targeting ships with links to Israel.

Around 12 percent of global trade passes through the Suez Canal, which links the Mediterranean to the Red Sea. The attacks have prompted several international shipping firms to divert their vessels from the canal and instead take a much longer route around Africa, adding to costs. At the end of January, the United Nations said the number of ships passing through the Suez Canal had declined 42 percent in the previous two months.

Speaking a conference, Sisi said “see what is happening at our borders...with Gaza, you see the Suez Canal which used to bring Egypt nearly $10 billion pers year, [these revenues] have decreased 40-50 percent and Egypt must continue to pay companies and partners.”

The Suez Canal brought in $8.6 billion in the 2022-2023 fiscal year. It is one of Egypt’s major sources of foreign currency together with tourism and remittances.