Egypt's Suez Canal loses billions and faces drone attack as regional tensions rise

Egypt’s Suez Canal, which handles about 10% of global seaborne trade, has seen a sharp decline in transit fees, costing the country roughly $7 billion in 2024 alone. The loss stems from shippers avoiding the waterway amid heightened Middle‑East tensions, especially threats by Yemen’s Houthi rebels to block the Bab el‑Mandeb Strait, a key approach to the canal.

On Wednesday, a drone strike hit the Egyptian port of Damietta near the canal, igniting a U.S.-owned gas‑storage tanker and another vessel. Iranian sources said the attack was intended to demonstrate how the conflict could further disrupt global shipping and energy supplies. Although traffic through the canal was not immediately halted, analysts warn that any sustained disruption would force ships to reroute around Africa, raising costs and extending transit times, while also threatening a vital source of revenue for Egypt.