Red Sea tensions cause sharp decline in Egypt's Suez Canal earnings
Egyptian President Abdel-Fattah El-Sisi has said that Red Sea tensions have caused a 40–50% decline in the country's Suez Canal revenues in 2024.
The Egyptian president’s remarks came on February 19 at the opening of the annual Egypt Energy Show in Cairo.
“The Suez Canal contributes about $10 billion annually to Egypt, but its revenues dropped 40-50%,” Sisi said.
President Sisi highlighted the COVID-19 pandemic, the Russia-Ukraine conflict, and the instability along Egypt's borders with Libya, Sudan, and the Gaza Strip as some of the past and present economic downturns that the North African nation has had to deal with.
However, he added that even though Cairo's obligations necessitate a substantial financial outlay, a concerted effort has been made to fulfil them.
“All this is going on while the Egyptian government is committed to fulfilling its obligations with petroleum companies, development partners, and financial institutions,” he adds.
The Suez Canal, regarded as one of the most significant waterways in the world, is Egypt's primary source of foreign exchange and the quickest shipping route between Europe and Asia.
Suez Canal revenues hit an all-time high between the 2022–2023 fiscal year with a record $9.4 billion in revenue reported. The canal is a major source of foreign exchange for the North African nation along with tourism and remittances.
Earlier in January, it was reported that the number of vessels passing through the Suez Canal had dropped significantly to 544 in the first two weeks of 2024 due to tensions on the Red Sea. Authorities said that ship traffic in the Suez Canal decreased by 30% compared to the same period in 2023, Egyptian media Ahram reported.
The United Nations Conference on Trade and Development (UNCTAD) reported that weekly transits through the Suez Canal have decreased by an estimated 42% over the last two months.
Western nations and the Houthi rebels have been at odds for a while. The Houthis, who rule over a large portion of Yemen, have been known to target vessels with ties to Israel and have vowed to attack any ship that is headed for Israel across the Red Sea.
The European Union on February 19 launched a naval operation to the Red Sea in the hopes of providing more security and assistance for commercial vessels.
