The Suez Canal faced a sharp revenue decline after a year marked by disruptions in the Red Sea. Reports indicate a 55% drop from a record $9.4 billion during the 2022-2023 fiscal year, attributed to disruptions caused by Houthi attacks on ships in the southern Red Sea. The explanation came from the Egyptian Finance Minister, Mohammed Maait, during a live broadcast on the Sada El Balad network, with context provided by RIA News.
Minister Maait described how the Ansar Allah faction has targeted commercial vessels, compelling ship operators to reroute away from the Suez Canal in an effort to avoid linking to the Mediterranean. In statements from the Houthis, the group signaled continued assaults until Israel ends its actions in Palestine. The shift in routes has meant higher operating costs, longer travel times, and escalated prices for oil and war risk insurance. Tolls collected by the Suez Canal remain a crucial source of foreign currency for Egypt, which is enduring one of its most challenging economic periods in recent memory. In the 2021-2022 fiscal year, canal revenues stood at about $7 billion, underscoring the impact of recent upheavals.
Analysts note that the price dynamics for delivery routes from India to Russia have also been affected by the maritime security situation in the region, adding to broader supply chain uncertainties.
Historically, the head of the Suez Canal Authority has called the canal a central asset in Egypt’s economy, while observers stress the need for resilience as the regional security picture evolves.
Overall, the latest developments illustrate how geopolitical tensions in the Red Sea can ripple through global trade lanes, influencing shipping costs, insurance premiums, and international routing decisions across multiple markets.