The Houthi attacks on Red Sea shipping is beginning to hit Suez Canal revenue, which represents 2% of Egypt's GDP. With this in mind, Egypt has asked the Houthis to focus their attacks only on Israeli ships, the London-based news outlet "Al-Araby Al-Jadeed" reports.
The report sits alongside Egypt's refusal to allow Israeli control of the Philadelphi Corridor, along the Egyptian Gaza border, even though it has spectacularly failed to prevent Hamas from smuggling weapons into the Gaza Strip.
The war has already harmed the Egyptian economy, not only through Suez Canal revenue, but also in gas export. The shutdown of Israel's Tamar offshore gas field for a month and the drastic reduction of natural gas exports to Egypt, hit its LNG (liquefied natural gas) exports during the highest demand season. LNG exports have since resumed after the resumption of Tamar gas production, but the damage has already been done. Now the Egyptians are trying to prevent more serious economic damage from less traffic through the Suez Canal.
Egypt has raised Suez Canal tariffs
In fiscal year 2022/23, Egypt's revenue from the Suez Canal totaled $9.4 billion. Meanwhile Houthi attacks in the first 11 days of January saw traffic in the Suez Canal fall 30% from the corresponding period of 2023. "Reuters" reports that 544 ships sailed through the Suez Canal compared with 777 ships in the first 11 days of 2023. In efforts to stem the fall in income, Egypt has decided to raise Suez Canal tariffs by 10%-15%.
At the same time, the International Monetary Fund (IMF) reports that maritime traffic around the Cape of Good Hope at the tip of southern Africa has risen by 67% this year.
Published by Globes, Israel business news - en.globes.co.il - on January 29, 2024.
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