Suez Canal Revenue Plummets Amid Red Sea Tensions
Date
7/19/2024 10:28:26 AM
(MENAFN- The Rio Times) In the fiscal year 2023-2024, the Suez Canal's revenue experienced a significant drop, falling by approximately 23%.
Earnings declined from $9.4 billion in the previous fiscal year to around $7.2 billion. The number of vessels using the canal also decreased from 25,900 to 20,148.
Geopolitical tensions and security threats, particularly from Yemen's Houthi rebels , drove this decline.
The Houthis have intensified attacks on ships in the Red Sea, especially targeting those perceived to be connected to Israel.
This escalation began in late 2023, significantly disrupting maritime traffic. Shipping companies, fearing attacks, have rerouted vessels around the Cape of Good Hope.
This diversion has increased transportation times and costs, further impacting the global supply chain.
The revenue drop has severe implications for Egypt's economy, which heavily relies on the canal for foreign currency.
The economic situation in Egypt is already strained with high inflation and a foreign currency shortage.
In January 2024 alone, canal revenues fell by 40%, with ship traffic decreasing by 30% compared to the previous year.
The 's struggles highlight the vulnerability of global trade routes to regional conflicts.
This situation emphasizes the significant economic repercussions that such disruptions can have on countries dependent on these critical waterways.
The broader economic impact includes rising shipping costs and delays, which contribute to global inflation.
Egypt, already grappling with high inflation and a currency crisis, faces additional pressure as canal revenues dwindle.
This situation forces Egypt to find alternative sources of foreign currency, exacerbating its economic challenges.
These developments underscore the interconnectedness of global trade and the far-reaching effects of regional conflicts on international shipping routes.
The Suez Canal , a crucial artery for global commerce, remains at the mercy of geopolitical instability, affecting economies worldwide.
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