Ahmed Kamel – Egypt Daily News
The head of Egypt’s Suez Canal Authority (SCA), Osama Rabie, confirmed on Thursday that vessel traffic through the strategic waterway has dropped by 50 percent as a result of continued attacks on commercial shipping in the Red Sea by Yemen’s Houthi group.
Rabie attributed the dramatic decline to a resurgence in maritime threats, despite earlier hopes that ship movements would recover after a lull in Houthi activity earlier this year. “We were optimistic that traffic would improve starting in June, especially after the attacks stopped in December 2024. But the recent sinking of two vessels in just the past two weeks, along with the intensifying war in Gaza and a fourfold increase in insurance premiums, has caused ships to avoid the canal again,” Rabie said.
The Suez Canal, a crucial source of foreign currency for Egypt is once again facing disruption, as Houthi militants have escalated their strikes on commercial vessels near the Bab el-Mandeb Strait at the southern entrance to the Red Sea. The attacks, reportedly a response to Israeli airstrikes on strategic targets in Yemen, have created a ripple effect, undermining international shipping and dealing a significant economic blow to Egypt.
Currently, only 30 to 35 ships are transiting the canal daily, down from pre-crisis averages of 60 to 70. The situation marks a serious downturn for the waterway, which had previously been a symbol of Egypt’s economic resilience and strategic relevance.
Government data released in late June indicated that canal revenues declined by 23.1 percent between April and June the third quarter of Egypt’s fiscal year, highlighting the mounting fiscal pressure on a country already grappling with high inflation, a weakened currency, and rising external debt.
Earlier in the year, there were signs of cautious optimism. Hopes for normalization surged after a short-lived ceasefire between Israel and Hamas was announced in early 2025. However, renewed hostilities in Gaza beginning in March dashed expectations for regional stability, with direct consequences for maritime security in the Red Sea and surrounding shipping lanes.
The ongoing disruptions not only threaten Egypt’s immediate revenue streams but also challenge broader development goals. Rabie noted that investment in infrastructure continues despite the crisis. He revealed that a water treatment plant in Ismailia, part of the July 26 Project, has received 550 million Egyptian pounds in funding and is designed to provide clean water for residents in the area until 2037.
While the canal’s revenue crisis adds a new layer of economic stress, it also reinforces the urgency behind President Abdel Fattah El-Sisi’s regional diplomatic engagements. In recent days, El-Sisi has been at the forefront of international talks aimed at ending the war in Gaza and restoring regional stability.
His leadership in mediating between Israel and Hamas, coupled with his call for recognition of Palestinian statehood, has positioned Egypt as a key actor in navigating both the humanitarian and economic fallout of the conflict.
The strategic significance of the Suez Canal means that its disruption is not merely a domestic issue but one with global implications for trade, security, and diplomacy. As instability in the Red Sea continues, and with Egypt’s economy under pressure, Cairo’s ability to balance internal resilience with regional leadership will be increasingly tested.
