Egypt’s Suez Canal, a vital artery for global trade, has experienced a dramatic decline in revenues, plunging by more than 60% in 2024, marking a $7 billion loss.

The canal, which accounts for 12% of global trade and is a key pillar of Egypt’s struggling economy, has been heavily affected by the ongoing war between Israel and Gaza, as well as a series of attacks by Yemen’s Houthi rebels.

Since November 2023, the Houthis have launched almost 100 strikes on commercial ships in the Red Sea, primarily targeting vessels en route to Israel.

These actions are part of the group’s broader campaign in solidarity with Palestinians, who have suffered devastating casualties in the ongoing conflict with Israel. The Houthis have made it clear that their attacks will cease if Israel’s military actions against Gaza stop.

The effects of these disruptions have been significant. Shipping companies, wary of potential attacks, have begun rerouting their vessels around the Cape of Good Hope in South Africa, bypassing the Suez Canal altogether.

This shift in shipping routes has led to a sharp decline in traffic through the canal, a key revenue generator for Egypt.

The financial blow to the country is severe, as the canal is one of Egypt’s most reliable sources of foreign currency, alongside tourism and remittances.

The economic fallout comes at a time of deepening instability for Egypt. The nation is already grappling with skyrocketing inflation, a plummeting currency, and widespread poverty.

The cost-of-living crisis has pushed millions of Egyptians into hardship, while the country’s political landscape grows increasingly tense.

The government’s tight grip on power, led by President Abdel Fattah el-Sisi, faces growing challenges amid regional instability, particularly in the wake of the collapse of Syria’s Bashar al-Assad.

Sisi’s government has been under fire for its oppressive tactics, including widespread political imprisonment, forced disappearances, and allegations of torture.

Human rights groups have consistently accused the regime of committing crimes against humanity. These issues, compounded by the economic crisis, have fueled a sense of disillusionment and unrest among Egypt’s population.

With the Suez Canal’s financial contributions dwindling, Egypt will be forced to rely more heavily on its tourism and remittance sectors.

However, both of these areas are facing their own challenges. The political climate in Egypt, marked by restrictions on freedom of expression and mass incarceration, has deterred many potential tourists.

Meanwhile, the economic difficulties in the region have put pressure on the flow of remittances from Egyptians working abroad.

The combination of these factors has placed Egypt’s economy on a precarious edge, with little sign of relief in sight.

As the Suez Canal struggles to recover from the impact of the Houthi attacks and the ongoing conflict in Gaza, the country’s financial future remains uncertain.