Economic Update – Developments in Maritime Navigation
Osama Rabie, the Chairman of the Suez Canal Authority, recently announced that 47 ships have altered their voyage paths to navigate through the Suez Canal instead of the longer Ras Al-Raja route since the beginning of this month. This shift signals a gradual stabilization in the Red Sea region.
Rabie highlighted that discussions with shipping lines and favorable assessments from various stakeholders regarding the stability of the Red Sea have influenced the decision of these vessels to reroute via the canal. He anticipates that even more shipping lines will opt for the Suez Canal as security conditions in the region continue to improve.
In prior statements, Rabie emphasized that the disturbances affecting the Red Sea did not establish a viable alternative for the Suez Canal. Recent developments underscore the canal’s critical role in maintaining the stability and sustainability of global supply chains.
Disruptions in the Red Sea
It is important to note that since November 2023, the Iranian-aligned Houthi group in Yemen has initiated attacks on ships traversing the Red Sea, citing support for the Palestinians in Gaza. These actions have disrupted global shipping routes, compelling many companies to divert their vessels to the more extended Ras Al-Raja route, which has significantly increased shipping costs.
In December 2024, Egyptian President Abdel Fattah El-Sisi stated that the disturbances in the Red Sea have cost Egypt approximately $7 billion in lost revenue due to the decline in Suez Canal traffic over the past year.
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