• Gaza war and Red Sea attacks incurred forgone revenue of $9–10bn to the Suez Canal
• Gulf tensions now threaten wider shipping routes and global supply chains
• Above Egypt, the overall region may face mix effect, from low to deep

Egypt’s economy has paid a heavy price for the geopolitical shocks shaking the Middle East. Since the start of the Gaza war in late 2023 and the escalation of attacks on commercial vessels in the Red Sea, the country has lost an estimated $9–10 billion in revenues from the Suez Canal, according to statements by President Abdel Fattah al-Sisi.

The losses stem from a sharp decline in maritime traffic after Yemen’s Houthi group began targeting ships in the Red Sea in solidarity with Gaza. Many shipping companies chose to avoid the Suez Canal and instead rerouted vessels around the Cape of Good Hope, a significantly longer and more expensive route linking Asia and Europe.

The economic impact for Egypt has been considerable. The canal, which generated a record $10.25 billion in revenue in 2022–2023, is one of the country’s main sources of foreign currency. The collapse in traffic contributed to a drop in earnings of nearly two-thirds in 2024 and worsened the pressure on Egypt’s external accounts.

Yet the disruption has not been limited to Egypt. The crisis has also affected global supply chains. By forcing ships to take longer routes around Africa, the Red Sea insecurity increased fuel consumption, insurance costs and transit times, pushing freight rates sharply higher and adding inflationary pressure to import-dependent economies, including many African countries.

Recent developments in the Gulf have added a new layer of uncertainty. Escalating tensions involving Iran and military strikes in the region have disrupted traffic through the Strait of Hormuz, another strategic maritime chokepoint through which roughly a fifth of global oil shipments normally pass. Shipping companies have once again begun diverting vessels and suspending routes, raising concerns about energy supplies and global logistics.

For the maritime industry, these overlapping crises reveal how fragile global trade corridors have become. The Suez Canal shortens voyages between Asia and Europe by roughly one to two weeks, making it one of the most efficient shipping routes in the world. When insecurity forces ships to bypass the corridor, the entire structure of global shipping networks is affected.

Some shipping companies had begun cautiously considering a return to the Suez route following periods of relative calm in the Red Sea. However, renewed tensions in the Gulf and the risk of further attacks have delayed those plans, prolonging the disruption to one of the world’s most important maritime arteries.

For Africa, the episode highlights a broader structural vulnerability. The continent relies heavily on maritime trade routes connecting Asia, Europe and the Middle East. When geopolitical tensions disrupt these corridors, the effects quickly translate into higher import costs, supply delays and renewed inflationary pressures across many African economies.

Ultimately, the crisis underscores a fundamental reality of the global economy: the stability of a few strategic maritime chokepoints—such as the Suez Canal, the Bab el-Mandeb Strait and the Strait of Hormuz—has become essential not only for global trade but also for economic stability in regions far beyond the Middle East.

Idriss Linge