Red Sea Attacks Cost Egypt $7 Billion in Canal Revenues This Year

Disruptions in the Red Sea have cost Egypt at least $7 billion in revenues this year, according to a government statement released on December 26.

The Houthi rebel attacks from Yemen have severely impacted navigation through the Suez Canal, a crucial artery for global trade. The Suez Canal serves as a vital source of foreign currency for Egypt’s $380 billion economy.

Last month, the Egyptian pound fell to a record low. Revenue from this essential waterway dropped by over 60%, highlighting the economic strain these disruptions have caused.

Since late 2023, Houthi attacks intensified following the outbreak of conflict between Israel and Hamas in Gaza. The Houthis have effectively shut down the southern Red Sea and parts of the Gulf of Aden for most Western shipping companies.

This blockade has prevented these companies from using the Suez Canal to transport goods between Europe and Asia. In addition to targeting ships, the Houthis have launched drones and missiles against Israel.

They assert that they will continue their attacks until Israel agrees to a ceasefire with Hamas in Gaza.

Backckground

Israel launched a series of airstrikes against Houthi targets in Yemen on December 26, 2024, marking a significant escalation in the ongoing regional conflict.

The Israeli Defense Forces (IDF) targeted strategic locations, including Sana’a International Airport and Al-Dailami military base. They also struck power stations in Hodeida and near Sana’a.

The attacks came in response to recent Houthi missile launches towards Israel, including one that injured 16 people in Tel Aviv on December 16. IDF Chief of Staff Lt. Gen. Herzi Halevi warned of potential increases in the pace and intensity of strikes.