The $9 billion revenue drop in the Suez Canal over the past two years, as cited by Egyptian President Abdel-Fattah al-Sisi, is primarily attributed to the challenging regional security environment caused by the attacks on commercial shipping in the Red Sea.
Revenue Decline and Causes
- Financial Impact: The Suez Canal Authority reported that the canal generated $4 billion in revenue in 2024, a massive decline from its historic high of $10.3 billion in 2023. This $6.3 billion drop in a single year largely accounts for the two-year loss mentioned by the President.
- Root Cause: Since November 2023, the Yemen-based Houthi group has been carrying out repeated attacks on commercial vessels in the Red Sea and the nearby Bab el-Mandeb Strait. The Houthis state their operations are in solidarity with Palestinians amid the Gaza conflict and are intended to pressure Israel and its allies.
- Shipping Diversion: Due to the severe security concerns, many global shipping companies have been forced to divert their vessels away from the Red Sea/Suez Canal route. Ships are instead taking the much longer, more expensive route around the Cape of Good Hope in Southern Africa, directly reducing traffic and tolls for the Suez Canal.
- Traffic Decline: The number of ships transiting the canal in 2024 saw a roughly 50% decline compared to 2023.
Egypt’s Economic Outlook
The loss of revenue represents a heavy financial impact, as the Suez Canal is a major source of foreign currency for Egypt. Despite this setback, President Sisi assured that the country’s economic situation is steadily improving. He stressed the need for “willpower, dedicated work, and patience” to learn from other countries’ success in navigating difficult circumstances.
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Source: Xinhua
