Why the Suez Canal’s Recovery Matters for Egypt’s Economy

The Suez Canal is beginning to reclaim its position at the heart of global maritime trade, with rising vessel traffic and the return of major shipping services suggesting that the waterway is emerging from one of the most difficult periods in its history.

In August, 1,358 vessels transited the canal, up 27 percent from 1,070 vessels during the same month last year, according to a statement by Suez Canal Authority Chairman Osama Rabie on Sunday, 20 September.  

Net tonnage rose by more than half to 68.3 million tonnes, while monthly revenues reached USD 567.1 million, compared with USD 326 million a year earlier.

Why this matters

For Egypt, more traffic means more revenue from one of its most important sources of foreign currency. It could also signal that one of the world’s most important shipping routes is becoming more reliable again, which matters to Egyptian businesses and consumers because the cost of transporting goods internationally can eventually show up in domestic prices.

A large number of products sold in Egypt depend, directly or indirectly, on international trade. Egypt imports finished consumer goods as well as the raw materials, machinery, and components used by local manufacturers. These products have to be transported, insured, stored, and distributed before they reach businesses and consumers.

The importance of shipping costs became particularly clear when attacks on commercial vessels disrupted traffic through the Red Sea. Major shipping companies such as Maersk began rerouting vessels around southern Africa. 

The result was a longer and more expensive journey between Asian and European markets, while the Suez Canal experienced a sharp decline in traffic. When that supply chain becomes more expensive, businesses around the world face higher costs.

In 2024, Egypt’s revenue from the Suez Canal dropped sharply by nearly two-thirds, falling to USD 3.991 billion from a record high of USD 10.25 billion in 2023. This decline is attributed to regional tensions and conflicts, particularly threats from Yemen’s Houthi rebels, who targeted maritime trade in protest of Israel’s actions in Gaza.

The impact continued into 2025. Egypt’s finance minister said the country lost around EGP 145 billion, equivalent to about USD 3 billion, in Suez Canal revenues during the 2024/25 financial year as Red Sea disruptions kept ships away from the waterway.

Global risk around Red Sea shipping

The security situation around the Red Sea has become part of a much broader global risk picture. The immediate concern is the renewed expansion of the Houthi movement along Yemen’s Red Sea coast and its growing ability to threaten the Bab el-Mandeb Strait, one of the world’s major maritime chokepoints.

The significance is amplified by the wider U.S.-Iran conflict and disruption around the Strait of Hormuz, creating the possibility that two critical routes for global energy and trade could face simultaneous pressure.

The Houthis are closely aligned with Iran and have received Iranian backing, including military and technological support.

Disruption to oil and refined-product shipping can increase transportation costs and risk premiums at a time when global energy markets are already under pressure from the conflict involving Iran.