Suez Canal revenue plummets by 50% with Red Sea disruptions

Shafaq News/ On Sunday, Egyptian Minister of Planning and Economic Development Hala El-Said revealed that the Suez Canal's revenues have experienced a 50% decline.

Speaking during a panel meeting at the World Economic Forum in Saudi Arabia, the minister attributed this decrease to disruptions in shipping caused by events in the Red Sea.

Earlier in February, Egyptian President Abdel Fattah El-Sisi had mentioned that the revenues of the Suez Canal, a vital global maritime route, had fallen "between 40 and 50%" due to incidents in the Red Sea.

This decline occurred amid heightened tensions in the southern Red Sea, mainly due to Ansarallah (Houthis) activities targeting passing vessels following the escalation in Gaza on October 7th, 2023.

The Houthi attacks have compelled numerous commercial vessels traversing the Suez Canal and the Bab al-Mandeb Strait to opt for an alternative, significantly longer route around South Africa's Cape of Good Hope. This shift has resulted in alterations, high costs, and delays in maritime routes.

In the fiscal year 2022-23, the Suez Canal generated $9.4 billion in transit fees for Egypt. However, this year's earnings are expected to be much lower due to the recent disruptions. 

Meanwhile, there has been a significant increase in traffic around the Horn of Africa, rising by at least 67%, according to data from the International Monetary Fund's PortWatch platform.

Egypt has raised transit fees by 5% to 15% to mitigate the financial impact. The new fee schedule came into effect in January in response to the evolving security situation and to offset the losses incurred by the reduced ship traffic through the Suez Canal.