Barran Press
The Suez Canal Authority announced a significant drop in revenue for the 2023-2024 fiscal year, losing approximately $2.1 billion due to Houthi attacks in the Red Sea.
Egyptian media reported on Tuesday, July 16, 2024, that the canal's revenue fell by 23%, reaching a total of $7.223 billion, compared to $9.399 billion in the previous year. This decline is attributed to the Houthi attacks, which have forced shipping companies to reroute their vessels through the longer Cape of Good Hope route.
The number of ships passing through the canal in May 2024 dropped to 1,111, compared to 2,396 in the same month of 2023, representing a decrease of 1,285 vessels. This decline was accompanied by a 68.5% reduction in total cargo tonnage, with May 2024 recording 44.9 million tons compared to 142.9 million tons in May 2023.
The Suez Canal Authority has responded by offering incentives and discounts to various ship types, including container ships, dry bulk carriers, and crude oil and petroleum product tankers, using alternative routes. These discounts range from 10% to 75% and will remain in effect until the end of December 2024.
Despite the recent decline, the Suez Canal's revenue reached $10 billion by the end of 2023. Over the past decade, the canal's revenue has increased by 63%, rising from $5.4 billion in 2013-2014 to $8.8 billion by the end of June 2024.
The Suez Canal is a vital shipping route connecting Europe and Asia, serving as a major source of foreign currency for the Egyptian economy.
Since November 2023, the Houthis have launched numerous attacks on commercial vessels in the Red Sea, disrupting global shipping and prompting some vessels to opt for the longer Cape of Good Hope route.
The Houthis, internationally recognized as a terrorist organization, have been carrying out attacks using missiles and drones against commercial ships in the Red Sea, the Arabian Sea, and the Gulf of Aden since last October.
These attacks have led to increased maritime insurance costs and prompted many international shipping companies to favor the longer route around the southern tip of Africa.
To deter the Houthis and protect maritime navigation, the United States formed a multinational coalition in December 2023. US forces have been conducting strikes against Houthi military targets.
Since January 12, 2024, the US and UK have carried out approximately 560 airstrikes against the Houthis, resulting in the deaths of 58 Houthi fighters and injuries to 86 others, according to the Houthi group's own admission.
The internationally recognized Yemeni government maintains that Western airstrikes are ineffective in neutralizing the Houthi threat to navigation and that the most effective solution is to support its armed forces in retaking Hodeidah, its ports, and other areas under Houthi control.