Egyptian President Abdel Fattah al-Sisi said on Tuesday that regional tensions had cut revenues from Egypt's Suez Canal by about $7 billion in 2024 compared with the previous year. According to a statement issued by Egypt's presidential palace, Sisi said the Suez Canal had lost more than 60 percent of its revenue this year compared to last year.

The Suez Canal is the only route from Europe/Mediterranean Sea to the Indian Ocean and the Far East, and the Egyptian government collects an annual fee for passing ships, which becomes an important source of foreign exchange for Egypt. In 2023, the Suez Canal charges passing ships a total of $9.4 billion, accounting for 15 percent of the Egyptian government's foreign exchange earnings.

The Suez Canal was thrust into the international spotlight in 2021 when the Ever Given container ship was jammed. After a new round of Israeli-Palestinian conflict broke out in October last year, Yemen's Houthi armed forces used drones and missiles to repeatedly attack targets in the Red Sea waters, demanding that Israel stop its military operations in the Gaza Strip. The ongoing tensions in the region have forced merchant ships to divert, resulting in a decline in Suez Canal revenues.

Most large container ship operators are diverting ships from the region to the Cape of Good Hope in South Africa, on longer and more expensive routes. However, these diversions have pushed up freight rates, adding billions of dollars to shipping companies' profits.

According to Alphaliner, as of November this year, there had been 40 consecutive weeks without a very large container ship (ULCS) with a capacity of more than 18,000TEU crossing the Suez River.

The Iran-backed Houthis say the missile and drone strikes are in solidarity with Palestinians in Israel's war with Hamas. But with Iran's internal problems escalating, the Houthis have recently scaled back their attacks, while Israel itself has become a target. The fall of the Assad regime in Syria and the withdrawal of Russian troops from Syrian ports have added to the uncertainty in the Middle East.

Some observers predict that Red Sea shipping services will resume as security improves, but probably not until the second half of 2025.