Cairo, March 17 (Reuters) – Egypt’s President Abdel Fattah al-Sisi has revealed that the country is experiencing a staggering loss of approximately $800 million per month in Suez Canal revenues due to ongoing regional instability, particularly the continued attacks on vessels in the Red Sea by Yemen’s Houthi rebels.

The Iran-backed Houthis have been targeting ships in the Red Sea since November 2023, in what they claim is a show of support for Palestinians in Gaza amid Israel’s ongoing military operations in the region.

These attacks have severely disrupted global maritime trade, forcing many vessels to reroute around Africa instead of passing through the Suez Canal, which has led to a surge in shipping costs and a significant dent in Egypt’s revenue.

Mounting Financial Losses for Egypt

Although the official statement from the Egyptian presidency did not explicitly mention the Houthis, the attacks have been widely recognized as the key factor behind the downturn in Suez Canal earnings.

President Sisi had previously warned in December 2023 that the disruptions could result in an annual revenue loss of around $7 billion for Egypt in 2024.

The Suez Canal is a vital economic artery for Egypt, generating billions of dollars in revenue annually. The waterway facilitates the passage of approximately 12% of global trade, including vital energy shipments.

With the escalation of Houthi attacks, many shipping companies have opted for the longer and more expensive route around the Cape of Good Hope, further straining the Egyptian economy.

Houthi Threats and Escalation

The Houthis have vowed to resume their attacks on U.S. vessels, following a series of deadly U.S. airstrikes on March 16, which reportedly killed at least 53 people in Yemen.

The airstrikes, the largest U.S. military operation in the Middle East since President Donald Trump took office in 2017, were conducted in retaliation for previous Houthi attacks in the region.

Additionally, the Yemeni rebels have issued fresh warnings against Israeli-linked ships, stating that they will resume attacks unless Israel lifts its blockade on humanitarian aid entering Gaza.

Over the past few months, multiple commercial and military vessels have come under missile and drone attacks, prompting the deployment of U.S. and allied naval forces to patrol the area.

Global and Regional Impact

The instability in the Red Sea has worsened global trade disruptions, leading to a surge in insurance premiums and shipping costs.

Several major shipping firms, including Maersk and MSC, have already suspended operations through the Bab el-Mandeb Strait, a critical gateway to the Suez Canal.

Egypt’s economic stability remains highly dependent on canal revenues, which are used to finance essential public services and development projects.

Analysts warn that continued disruption could further strain Egypt’s foreign currency reserves and weaken investor confidence in the country’s economic outlook.

As the crisis unfolds, regional and international actors are scrambling for solutions to secure maritime routes while mitigating the broader consequences of the conflict.

However, with no immediate resolution in sight, Egypt faces increasing economic pressure as the Suez Canal’s losses mount.