The head of the Suez Canal Authority, Osama Rabie, has projected that traffic through the waterway will gradually return to normal by late March 2025, with full recovery expected by mid-year, contingent on the stability of the Gaza ceasefire.
According to Bloomberg, currently, the canal is handling only 32 ships per day, a sharp decline from the 75 vessels passing through before the Israel-Hamas conflict erupted on October 7, 2023. Large oil tankers have not been able to transit the canal, further disrupting global trade. This reduction in traffic has led to significant economic losses for Egypt, with the Suez Canal’s revenue dropping by 60%.
Key facts about the Suez Canal
UNCTAD has defined the Suez Canal as a maritime chokepoint. These critical waterways provide shortcuts on lengthy intercontinental maritime journeys and reduce time and costs. In particular the Suez Canal:
- Connects the Mediterranean Sea with the Red Sea
- Crucial for trade between Europe and Asia
- Reduces travel time for ships by eliminating the need to navigate around Cape of Good Hope
- Share of global trade volume: Around 10 per cent (tons)
- Share of all global container traffic (TEU): 22 per cent
- Top three commodities (2023 volumes): cars and containers (20 per cent each); oil products (15 per cent); and crude oil (10 per cent)
The country is expected to face losses of around $7 billion in the current financial year ending in June. In an effort to stabilize the economy, Egypt allowed its currency to depreciate by approximately 40% last March, which facilitated securing a $57 billion global bailout package from the International Monetary Fund (IMF) and other international partners.
The canal’s recovery would be crucial for Egypt as it grapples with its most severe economic crisis in decades, Bloomberg concludes.
