Suez Canal revenue drops $7bn amid Red Sea instability

Suez Canal revenue fell 60 percent, or $7 billion, year on year in 2024 as ongoing instability in the Red Sea disrupted global shipping traffic, according to a news report.

Despite the significant earnings drop, the Egyptian government is pressing ahead with modernisation projects to enhance the canal’s capacity and maintain its pivotal role in global supply chains, the Egypt Today newspaper reported.

In a meeting with Osama Rabie, chairman of the Suez Canal Authority (SCA), Egyptian President Abdel Fattah El-Sisi reviewed measures to address the challenges posed by instability in the Red Sea and Bab El-Mandeb Straits.

The discussions focused on modernisation initiatives designed to enhance the Suez Canal’s capacity.

Key projects include the completion of the southern sector development, and the expansion of the navigation route between 132km and 162km to accommodate larger vessels.

These improvements aim to increase cargo volume and boost the efficiency of two-way vessel traffic.

El-Sisi directed the SCA to prioritise canal development projects and reinforce its role as a cornerstone of global trade, the report said.

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Yemen’s Ansar Allah group, widely referred to as Houthis, began attacking ships in the Red Sea last November, saying their actions were a response to the conflict in Gaza.

As a result, shipping industry giants have chosen to reroute vessels around the Cape of Good Hope and the tip of Africa.

This adds an extra 3,000 nautical miles and 10 days to the journey, as well as up to $1 million extra on the fuel bill for each trip between Asia and Northern Europe.

The Suez Canal provides around 10 percent of Egypt’s current account income, the consultancy firm BMI estimates.