Egypt’s foreign currency lifeline takes a direct hit as war-fueled maritime threats slash traffic through the historic trade artery
Egypt’s Suez Canal, one of the world’s busiest maritime shortcuts, saw its annual revenue nosedive by nearly two-thirds in 2024. The drop comes amid mounting regional turmoil, with commercial shipping increasingly rerouted to avoid danger zones near the Red Sea.
Once a shining source of hard currency for Cairo, the canal is now grappling with fallout from drone and missile attacks, sinking ships, and an unstable geopolitical backdrop that’s spooked global trade.
From Record Highs to Alarming Lows
Just a year ago, Egypt was celebrating a record $10.25 billion in Suez Canal revenue. Fast forward 12 months and that figure has crashed to just $3.991 billion.
The culprit? Tensions inflamed by the ongoing war in Gaza and escalations by Houthi rebels in Yemen. Since late 2023, the rebels have repeatedly struck vessels sailing near Bab el-Mandeb — the critical gateway between the Red Sea and the Gulf of Aden.
According to Egypt’s Suez Canal Authority, vessel traffic plunged by 50% in 2024. Only 13,213 ships made the crossing, compared to over 25,000 the previous year. That’s the lowest figure in over a decade.
War in Gaza, Missiles in the Red Sea, and Global Rerouting Chaos
The Suez Canal wasn’t designed to be a battlefield casualty. But shipping companies aren’t willing to take the risk.
Houthi attacks — often aimed at vessels linked to or believed to be headed for Israel — have turned the Red Sea into a danger zone. Between November 2023 and January 2024 alone, more than 100 ships were targeted. Two were sunk. Four sailors lost their lives.
Many global shipping giants have rerouted vessels around the Cape of Good Hope — a far longer and costlier detour, but one that skips the war-torn choke point. It’s safer, but not sustainable.
And Egypt is paying the price.
Why the Canal Matters So Much to Egypt
Let’s not sugarcoat it: the Suez Canal is Egypt’s cash cow. It brings in billions of dollars in much-needed foreign currency every year — money that helps fund imports, pay off debts, and stabilize the Egyptian pound.
When revenue shrinks, the ripple effects are immediate. Just consider what’s on the line:
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Suez Canal revenues account for nearly 2% of Egypt’s GDP.
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The canal supports thousands of direct and indirect jobs.
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It’s a cornerstone of Egypt’s foreign exchange reserves.
So yes, this isn’t just about trade routes — it’s about the entire economic heartbeat of a nation.
Shipping Volumes, Revenue, and Reality — A Quick Snapshot
Here’s how the numbers stack up from 2023 to 2024.
| Metric | 2023 | 2024 | Change |
|---|---|---|---|
| Revenue Generated | $10.25 billion | $3.991 billion | -61% |
| Number of Ships | 25,000+ | 13,213 | -50% |
| Average Revenue per Ship | ~$410,000 | ~$302,000 | -26% |
These figures make the problem impossible to ignore.
Houthi Threats Continue, and So Does the Uncertainty
The Houthis haven’t backed down. If anything, their threats have become more frequent — and more targeted.
They’ve said they’ll continue attacking ships linked to Israel until the war in Gaza ends. That means there’s no clear timeline for when normal operations through the Red Sea can resume.
In the meantime, insurance premiums on vessels passing through the area have surged. Operational costs are up. Risk appetite is down. Shippers are looking elsewhere, and Egypt’s toll booths are left waiting.
One shipowner reportedly told Reuters, “We can’t afford to play roulette with billion-dollar cargo.” That says it all.
Egypt’s Government Stuck Between a Rock and a Hard Place
Egyptian authorities are trying to hold things together, but options are limited. They can’t stop the Houthis. They can’t force ships through the canal. And they certainly can’t afford to see another year like this one.
The canal authority has upped its outreach to international partners and tried to roll out incentives. But it’s tough to sell optimism when missiles are flying.
There’s been talk of working more closely with the EU and regional allies to secure maritime routes. Whether that leads to boots in the water or just diplomatic backchannels — nobody knows yet.
What’s clear is that Egypt can’t weather another year like 2024 without serious consequences.
