Suez Canal revenue down $10bn due to regional conflicts

Egypt’s Suez Canal revenues are down by billions of dollars because of regional instability and conflicts, President Abdel Fattah El Sisi has said.

The $10 billion (EGP500 billion) decline in cumulative Suez Canal receipts since the start of the decade, along with global supply-chain disruptions and rising energy costs, has placed Egypt at a “historic crossroads”, the president said.

“Since 2020 onwards, Egypt has faced crises and negative developments that were difficult to avoid… which undoubtedly had an impact on the state’s ability to act,” he said.

The president’s speech on Sunday came just days after the government was forced to increase politically sensitive fuel prices by an average of 17 percent, citing “exceptional geopolitical developments”.

He said regional conflicts, “in addition to the wars in Gaza and Iran”, have required the government to take necessary economic measures and ensure the continued availability of strategic commodities.

“​​I am aware of the negative feelings regarding the recent increase in petroleum product prices… However, the requirements of reality sometimes compel difficult measures for which there is no alternative, in order to avoid options that would be far harsher and more dangerous in their consequences.”

The Red Sea corridor accounts for about 12 to 15 percent of global trade and nearly 30 percent of container traffic.

Houthi strikes on vessels through the Bab al Mandab Strait and Suez Canal caused traffic to drop more than 90 percent in 2024 and 2025, according to research group Jefferies. This cost Egypt $800 million per month, El Sisi said last year.

In November, Suez Canal Authority chairman Ossama Rabiee said he expected more global shipping lines to return to the waterway following the signing of a Gaza peace pact.

He expected 2025 revenue to exceed $4 billion, slightly higher than 2024, and hoped to reach pre-crisis income of $10 billion as early as next year.

The Suez crisis added to Egypt’s years-long struggle with price increases and foreign-currency shortages, and led the IMF to boost $3 billion in pledged loans from December 2022 to $8 billion in March 2024. 

Further reading:

• Gaza peace pact paves way for Suez Canal recovery
• How Egypt’s economy is exposed by the Iran war
• Egypt offers customs relief for Gulf-bound cargo ships

The US-Israel and Iran conflict, which started on February 28, has almost shut the Strait of Hormuz, which accounts for about a fifth of the world’s daily oil and liquefied natural gas (LNG) supply.

Saudi Arabia, Qatar, Iraq and Kuwait have cut production amid attacks on oil facilities, prompting oil prices to rise as high as $120 per barrel.

Egypt has so far avoided direct hits from the Israeli-US war against Iran, but its tight finances and reliance on energy imports make it especially exposed to the conflict’s economic impact.