Suez Canal suffers $7 billion loss due to war-related traffic cuts

Revenue from the Suez Canal, a vital global trade route, has plummeted by approximately 60% due to the ongoing Israel-Hamas war, with projected losses reaching around $7 billion in the current financial year ending in June, said Osama Rabie, chief of the Suez Canal Authority.

Rabie expressed hope that traffic through the waterway would gradually return to normal by late March and fully recover by mid-year, provided the Gaza ceasefire remains intact. However, shipping companies have signaled caution, indicating it is still too soon to plan a full-scale return, Caliber.Az reports via foreign media

In a related development, Yemen’s Houthi rebels announced they would cease targeting US and UK vessels following a pause in hostilities between Israel and Hamas. Despite this, the number of ships transiting the canal remains significantly reduced.

Currently, only 32 ships per day pass through the canal, compared to 75 before the war began on October 7, 2023. Additionally, supertankers are still avoiding the route, Rabie noted in a phone interview with Egyptian television.

The decline in Suez Canal revenue presents a further challenge for Egypt, which is grappling with its most severe economic crisis in decades. To stabilize the economy, authorities devalued the Egyptian pound by about 40% in March 2023, securing additional financial support from the International Monetary Fund and other global lenders as part of a $57 billion bailout package.

By Khagan Isayev